Nonlinear model or linear model

[jpfeifer]

Why do we log linearize a model by hand?

Historically, the computer did not do it for you. So some of it is path dependence. Nowadays, people loglinearize their model for two reasons: To gain intuition into the working of the model. With linear equations that is often easier There are cases where the nonlinear equations do not have a closed form expression you could enter into the computer (the New Keynesian Phillips Curve with Calvo pricing and markup shocks being the prime example)