hello
Please Help Me:
i can’t linearize this equation:
http://s1.picofile.com/file/8263519518/11.png
where G is government expenditure, r is interest rate, b is bond , π is p/p(-1), T is tax, EX is nominal exchange rate, Oil is oil revenue and DC is government debt to central bank.
What is your problem? This is a standard equation. You simply need to apply a first-order Taylor approximation.