Dear Professor Johannes Pfeifer

I have read your excellent paper titled **“A Guide to Specifying Observation Equations for the Estimation of DSGE Models”**, *University of Cologne, July 8, 2018*. I want to ask you the following question, please:

In section *1.1 A Baseline RBC Model (page, 7), equation (2)*, you set labor hours, h_t=1. Imagine, please, that we have a model in which h_t\neq 1. In this case do we still have to divide our observable variables by the civilian labor force? For instance, set Y_{\text{pc},t}^{\text{data}}= Y_t^{\text{data}}/\text{N}_t^{\text{data}} ?.

Thank you very much for your answer.

Kind Regards

Sinclair