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I am working on my thesis, doing a model with energy price. I am following this paper "Energy Price Shocks and Financial Market Integration: Evidence from New Keynesian Model", Tarek Ghazouani, 2020.

I have been having troubles in log-linearizing with this equation, which is given by enter image description here

è stata ottenuta massimizzando il vincolo di bilancio rispetto Ft enter image description here enter image description here

These two equations are also introduced but I can't understand how they are used enter image description here

I would appreciate very much any help.

Alessia

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  • $\begingroup$ What specific problem with log-linearization you have? Just literally take natural log of both sides. $\endgroup$
    – 1muflon1 ♦
    Oct 9 at 12:01
  • $\begingroup$ I know that it is not so easy, I know it's not that simple, it's necessary then express in percentage deviation from the steady state. I generally apply this formula: (f'(x)*x/f(x))*xlog, respect every variable, so I was wondering if my calculations are right and where did that equation come from $\endgroup$
    – Alessia Gigliotti
    Oct 9 at 17:52

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