# Sigh...same tired old question about observation equations and models

**URL:** https://forum.dynare.org/t/sigh-same-tired-old-question-about-observation-equations-and-models/28300
**Category:** ML/Bayesian estimation
**Created:** [2 March 2026 20:57 UTC](https://forum.dynare.org/t/sigh-same-tired-old-question-about-observation-equations-and-models/28300 "2026-03-02T20:57:10Z")
**Posts on this page:** 1
**Showing post:** 4

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### Author: ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)
#### Post date: [3 March 2026 13:50 UTC](https://forum.dynare.org/t/sigh-same-tired-old-question-about-observation-equations-and-models/28300/4 "2026-03-03T13:50:18Z")

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Have a look at

> [@Question about understanding irfs in dynare](https://forum.dynare.org/t/question-about-understanding-irfs-in-dynare/10622/4):
>
> To be more precise: it depends on how the variables in your model are measured. As @stepan-a says, Dynare conducts a linearization. If you for example have a nonlinear model and your model variable is simply the level of output, the IRF will measure the difference between the variable and its steady state (or its mean at higher order). This is the case with [https://github.com/DynareTeam/dynare/blob/master/examples/example1.mod](https://github.com/DynareTeam/dynare/blob/master/examples/example1.mod) In contrast, if your model variable already measures percentage…

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