Hi Dynare Forum
I am trying to log-linearize the following equation in a NK model with time-varying depreciation:
So far I have the following derivations:
I am unsure on how to get to terms I have derived to look like the ones presented in Gali2007:
And then I am specifically concerned about the new delta*delta_bar i get. If this should indeed be positive or if this should be negative…
Can anyone help?