Hi everyone

I am a student from the University of Berlin and I am currently working on replicating Galí (2007) article “Understanding the effects of government spending”.

Where I struggle is to log-linearize equation (5) describing the dynamics of Tobins-Q:

with the resulting log-linearized equation being (23) in the image.

The other equations are straightforward to log-linearize, but this particular one I struggle with. Any guidance in the right direction is much appreciated.

Peter.