Ramsey policy in linear model

[jpfeifer]

I keep repeating myself. You cannot work with a linear utility function. But you may be able to express your nonlinear utility function in variables that measure deviations from steady state.

Related:

Mix of equations in levels and log linearized form

No, you can combine linearized and nonlinear equations provided that i) you only use a first order approximation and ii) correctly link the levels and percentage deviations. If z is the level of a variable, then zhat=log(z)-log(steady_state(z))