dear professor Pfeifer;

I have been reading your paper “Macroeconomic Eﬀects of Financial Shocks: Comment”, the steady state value of chi {\chi} (long_name=‘Lagrange Multiplier demand constraint’) is 0, it seems that you write the orginal model and use linear model estimation. I want to know if I want to write down linear model,do I have to linearize the whole system, or can I loglinearize the whole system except chi, since this is much easier and more intuitive.

best

mercury