Good morning to everyone!

I’m trying to replicate the model in *Rubart, Heterogeneous labor, labor market frictions and employment effects of technological change*

the model should be solved in deviation from the steady state.

dynare is unable to find a steady state. What is wrong? I attach here the code

the problem (one of the problems) is that anytime I’ve 1-exp(var) at the denominator in an equation this gives me inf for the steady state, but i suppose this is the correct way to log-linearize the model.

Thank you so much!

treloglin.mod (4.5 KB)

No, this is not a proper way of loglinearization. It seems you are trying to do an exp()-substitution, but in this case, the steady state values are not 0. You may want to consult Linearisation vs Log-linearisation and Question about understanding irfs in dynare for your options.

Thank you! I think I understood what was wrong…but the problem is that I still don’t get 0 residuals in all my equations. I don’t really understand where the misteke is. Thank youtreloglin.mod (5.8 KB)

For example

```
exp(log(p_s)) = exp(log(m_s))/((exp(log(s_s))*(1-exp(log(h_s)))));
```

is not a linear(ized) equation

Thank you! So do you think I should manually linearize those equations or avoid to apply log linearization?

Thank you!