Use preprocessor for loglinearization (#349) · Issues · Dynare / dynare

Use preprocessor for loglinearization

An often heard request is a way to loglinearize a model instead of a linearization. Currently, the way to go is to put all variables in exp(). This is mechanic and error-prone work.

If it is easily doable, I would like to propose to use the preprocessor to make this substitution, similar to the predetermined_variables-command substituting the lag of the current period. We could then add a command like model(loglinearize)

to tell the preprocessor to loglinearize.

At the same time, we need a command like non_logarithmic_variables similar to the predetermined_variables command to exclude already logarithmic variables (like e.g. technology) or variables with a negative steady state. I think this is a better option than specifying explicitly which variables to substitute.

If possible, a design issue we would need to discuss is the behavior in steady state computation. I would suggest that the model(loglinearize) automatically triggers taking the log of the corresponding initvals so that users can enter the model in nonlinear standard form and Dynare takes care of the rest.

An often heard request is a way to loglinearize a model instead of a linearization. Currently, the way to go is to put all variables in exp(). This is mechanic and error-prone work.

If it is easily doable, I would like to propose to use the preprocessor to make this substitution, similar to the predetermined_variables-command substituting the lag of the current period.
We could then add a command like
`model(loglinearize)`

to tell the preprocessor to loglinearize.

At the same time, we need a command like `non_logarithmic_variables` similar to the `predetermined_variables` command to exclude already logarithmic variables (like e.g. technology) or variables with a negative steady state. I think this is a better option than specifying explicitly which variables to substitute.

If possible, a design issue we would need to discuss is the behavior in steady state computation. I would suggest that the `model(loglinearize)` automatically triggers taking the log of the corresponding initvals so that users can enter the model in nonlinear standard form and Dynare takes care of the rest.