# Log-linearization and bonds which are zero in steady state **URL:** https://forum.dynare.org/t/log-linearization-and-bonds-which-are-zero-in-steady-state/3877 **Category:** General DSGE Modeling **Created:** [5 May 2014 12:15 UTC](https://forum.dynare.org/t/log-linearization-and-bonds-which-are-zero-in-steady-state/3877 "2014-05-05T12:15:31Z") **Posts on this page:** 1 **Showing post:** 4
### Author: ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer) #### Post date: [5 February 2021 09:23 UTC](https://forum.dynare.org/t/log-linearization-and-bonds-which-are-zero-in-steady-state/3877/4 "2021-02-05T09:23:46Z")
It’s not inconsistent at all. At first order, it is simply a scaling with the Jacobian, i.e. the steady state of the variable. You are expressing everything in percentages if you put it in exp(). But some variables are already in percent or a percentage of it does not make sense as the steady state is 0. In those cases, you don’t do the exp()-substitution. Also note that doing a full exp()-substitution is not recommended. See > [@Question about understanding irfs in dynare](https://forum.dynare.org/t/question-about-understanding-irfs-in-dynare/10622/4): > > To be more precise: it depends on how the variables in your model are measured. As @stepan-a says, Dynare conducts a linearization. If you for example have a nonlinear model and your model variable is simply the level of output, the IRF will measure the difference between the variable and its steady state (or its mean at higher order). This is the case with [https://github.com/DynareTeam/dynare/blob/master/examples/example1.mod](https://github.com/DynareTeam/dynare/blob/master/examples/example1.mod) In contrast, if your model variable already measures percentage… --- _[View the full topic](https://forum.dynare.org/t/log-linearization-and-bonds-which-are-zero-in-steady-state/3877)._