Questions tagged [log-linearization]

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Log-linearizing a non-separable utility function around the steady state

I've started reading Jordi Galí's Monetary Policy, Inflation and the Business Cycle (2nd ed., 2015). In section 2.5.2, Galí considers an example with the following non-separable period utility ...
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55 views

Constant elasticity proof for log-linear demand curve

From Perloff 2008e solved 2.2: Q: Show that the elasticity of demand is a constant e if the demand function is log-linear, ln Q=ln A+e ln p. A: Differentiating with respect to p, we find that (dQ/dp)/...
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40 views

How do you use a Log-linear model when you have negative Xs?

I am trying to us a Log-linear model to derive an elasticity. However, some of my Xs are negative numbers. Being as the model relies on the natural log of the Ys and the Xs, how can this model work ...
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log linearization around steady state (price dynamics)

I'm stuck with a derivation from Gali's book. In the version 2008, I can't get eq. (7) from chapter 3. All is ok until the following: $$ (1-\epsilon)\log\pi_{t}=\log(\theta+(1-\theta)\exp[(1-\...
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Log-linearization about steady state

I am working on a Solow model where: $$ y_{t} = k_{t}^{\alpha}(Z_{t})^{1-\alpha} $$ $$ y^{*} = (\frac{s}{n+\delta})^{\frac{\alpha}{1-\alpha}} Z $$ $$ k^{*} = (\frac{s}{n+\delta})^{\frac{1}{1-\alpha}}...