I am about to estimate a variant of Kollmann (2001, 2002) extended with a variety of shocks and rigidities. I have done so before using Chris Sims’ GENSYS, but this time I should like to use DYNARE.
The model is without trends and stated in levels, (meaning I have not have not linearized it).
Having read the DYNARE documentation I still seek answers/advice to the following two questions:
- Which estimation option is preferable in my situation? Linear or loglinear?
- How should I transform my data (GDP for example) in order make sure that the unit of measurement of the variables in the model is comparable to those of the observed variables?