Regarding the retailer's setting in Iacoviello (2005), is there a model for non-digital linearization? I want to use a nonlinear model for welfare analysis

The model combines the two equations to get the Phillips curve directly. I want to do a welfare analysis. Is there a nonlinear equation set by this retailer? grateful.

See DSGE_mod/Derivation_Recursive_Pricing_Equation.pdf at master · JohannesPfeifer/DSGE_mod · GitHub and DSGE_mod/Born_Pfeifer_2018_welfare.mod at master · JohannesPfeifer/DSGE_mod · GitHub

Thank you for your selfless help, professor

professor. When the production function only has labor as a factor of production, I will calculate the marginal cost. When land enters the production function as a factor of production, I don’t know how to calculate the marginal cost. Because in my model, the land in the current period is composed of the land in the previous period plus the newly added land. Can you understand what I mean?

Marginal cost is just the Langrange multiplier on the production function. You can derive it for any production function.