Using Dynare to linearize my model

General DSGE Modeling
1

Hi,

I am trying to find an answer to the following question:

If I use Dynare to linearize my New Keynesian model (using exp()), is the model linearized around a positive steady state rate of inflation, as in the work Ascari and Ropele? Such that trend inflation has distorting effects.

Thanks.

2

That depends on your setup, i.e. whether you have trend inflation and full indexing.