Hi

I am a novice and I have reached a contradiction. please correct my mistake. Thanks in advance

Productivity comes in two forms in the models(As far as I have seen):

Of course, I know these two are one, but the models use one of these two forms

Now when we want to calibrate the steady state:

According to the first method:

Log(A)=rho_A*log(A) Therefore A=1

According to the second method: A=1

Now my question is about the other shocks. For example, shock to government spending in the RBC model(DSGE_mod/RBC_baseline.mod at master · JohannesPfeifer/DSGE_mod · GitHub)

If we use the following form:

g_ss=g and g=gshare*y;

That is, g_ss is not necessarily equal to 1. It depends on gshare

That is reasonable

But if we use the second form:

In the steady state:

Log(g)=rho_g*log(g) Therefore g=1

That is, in other equations, if we have g, we put it equal to 1(in steady state).

What is my mistake??