Hello,

I am new to the DSGE models literature and Dynare, so probaly my question is trivial. My aim is to compare the Smets and Wouters (2007) model to real data in terms of correlations among variables. Now, to my understanding, the simulated data from the model are log-linearized- real-world data,instead, are in levels. How do I make the two datasets homogeneous for comparison? My idea is to take the log of real-world data and filter them with a band-pass filter (and filter the simulated data as well). The problem arises when I have to take the log of the inflation rate and the real interest rate that in many cases are negative. Maybe I could try to reconstruct the model’s variables in levels, but this looks quite complicated, if not infeasible. If you could suggest a solution to this issue, I would be very grateful.

Thank you a lot.