Linearized shock

Dynare help (legacy posts)
1

Hey,
I’m new in using dynare, i have to replicate a paper with a two country rbc model. I have a non linear model but i write the shock like “exp(x)” . Now my question, am I allowed to declare it as a linear model allthough it is not fully linearized. Because the whole model works if i use linear in stoch_simul, but it doesn’t work without.

Thanks for your help

savunzli

2

No, only use the linear option if the model is truly linear. Saying that it does not work without suggests that your model is not really linear and Dynare has an issue finding the steady state.