```
var logdv_Y;
parameters sig_Z rho_Z;
varexo eps_Z;
sig_Z = 0.01;
rho_Z = 0.5;
model;
logdv_Y = logdv_Z + logdv_L;
logdv_Z = rho_Z*logdv_Z(-1) + sig_Z*eps_Z; //shock process
end;
shocks;
var eps_Z; stderr 1;
```

I have all my structural equations in log-linearized form (log-deviations). So let’s say I want to see the effect of a 0.01 standard deviation tech shock (I just simplified the system of equations just to show the interaction between Y and Z).

If for POLICY AND TRANSITION FUNCTIONS, I get

0.009935 for the effect of esp_Z on logdv_Y, can I interpret as

“a percent shock to technology brings about a 0.0099% increase in output”? I am trying to see if I can interpret “one standard deviation shock” as “one percent shock” if the equations are log-linearized, and how the coefficient should be interpreted accordingly.