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DSGE - Dynamic Stochastic General Equilibrium models.

1 vote
1 answer
72 views

Log-linearizing a second order term around the steady-state

I want to log-linearize around the steady-state, as it is commonly done for DSGE models (see here) and I want to disregard all second order terms. …
mindandfields's user avatar
1 vote
0 answers
58 views

Help with the log-linearization of a difficult term

I want to log-linearize around the steady-state, as it is commonly done for DSGE models (see here). $\bar{x_t}$ are steady-state values and $\hat{x_t}$ are percentage steady-state deviations. …
mindandfields's user avatar
1 vote
1 answer
71 views

Conceptual question about the zero-inflation steady-state in DSGE-models

As I understand, it is usually common practice, to choose DSGE models in such a way, that the steady-state inflation is freely choose-able and for simplifications it is than usually assumed to be zero. …
mindandfields's user avatar
1 vote
0 answers
55 views

Help me understand the shock process in this DSGE model

I'm looking at the model proposed in Hansen2020. The not linearized model features a shock equation looking like this: $A_t = \bar{A}*e^{\epsilon_t}$ , where $\bar{A}$ is the steady state of $A_t$ and …
mindandfields's user avatar