Someone help me please. I have problem with deriving log-linearization of BGG1999( the financial accelerator in a quantitative business cycle framework, handbook of macroeconomics, chapter 21).
In equation 4.16: the second term is about C_e_t+1, shouldn’t it be about W_e_t ?
In equation 4.24: how to deal with the integral term in equation 4.13? why not log-linear it just like equation B.8 to get equation 4.14? If I ignore the integral term in equation 4.13, I can’t get 4.24, either. how to get it?
And I also have problem with equation 4.17 ( expression of ‘nu’) and equation 4.19(expression of ‘phi’).
Thank you so sososososo much.
Did you try having a look at the teaching materials of Larry Christiano?
Thank you so much!
Do you mean ‘Lawrence Christiano’ ? I have read his teaching materials about bgg financial frictions part which scattered in his different courses but not completely the same as bgg 1999, and have not steps about log-linearization.
I can derive other log-linear equations in bgg 1999, however always have wrong with above equations. How I wish there is detailed materials I can refer to…
Yes, I meant those. So there is nothing useful in there. I see. How about Christensen/Dib (2008). They also linearize.
I have seen questions like yours popping up repeatedly, but have never seen a satisfactory answer.