What is the advantage of exponential nonlinear equation

General DSGE Modeling
1

Dear Professor Jpfeifer,
When I see some dynare codes written by others, I have found that they like to transform the original nonlinear equations into exponential forms. May I ask what is the advantage of this?

For example,
y=A*(ksik(-1))^alphah^(1-alpha);

exp(y)=exp(A+alpha*(ksi+k(-1))+(1-alpha)*h); and in steady_state_block
y=log(y_ss)

Regards,
Modesty

2

To get an interpretation in percent. See e.g. Question about understanding irfs in dynare - #4 by jpfeifer

3

Professor Jpfeifer, thank you so much for telling me about this! This is very important for me!

4

@jpfeifer And Professor Jpfeifer, is exp() useful for solving the problem of unsatisfaction of BK condition, may I ask?

5

No, a consistent exp()-substitution will not alter the BK conditions.