i tried to replicate medina/soto model on dynare, i use the Log-linearized model and i estimate my model with Bayesian Approach.

in my dynare code the variables are fractional deviations from their steady state values (for exemple y_hat, c_hat, inv_hat…etc)

my data contains the same variables as in paper (page 16).

for the real variable (gdp, consumption, investement) i use the logarithm of

its first difference, demeaned, (ΔlnYt,ΔlnCt,ΔlnINVt)

in my dinare code these variable are the variable observable of y_hat, c_hat, inv_hat?:

y_hat=ΔlnYt

c_hat=ΔlnCt

inv_hat=ΔlnINVt

or the observable variable of dy_hat,dc_hat, dinv_hat?

dy_hat=ΔlnYt

dc_hat=ΔlnCt

dinv_hat=ΔlnINVt

thanks

dtbc457.pdf (485 KB)