Is it possible to put a non-linear model into Dynare and ask Dynare to log-linearize some variables and to linearize some others?
I would put the variables (X) that I want in log-lin in the form “exp(X)” while I would put the other ones without exp.
Can those kinds of variables stay together in a model?
For example, I want the deviation of the interest rate, not the log-deviation.
Thank you. I got the point. Just another question. Does Remark 19 mean that it is “better” to put GROSS interest or inflation rates in log rather than in levels?
If they are close to 1, it does not really matter. In that case, percentage and absolute deviations are the same as the base is approximately 1. Moreover, what is the metric for “better”? It all depends on the interpretation you want
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That should not make any difference. Regardless of variable transformations, the equation must be the same, only the variable interpretation differs. Please be more specific and post the particular exogenous process/equation you are talking about.