Log-Linearization of Stochastic Economic Models
This paper studies formally the common practice of log-linearizing stochastic economic models, making precise the conditions under which stability of the original model can be inferred from that of the linearized model. A transformation to recover the stochastic equilibrium of the former from that of the latter is provided.
|Collections||ANU Research Publications|
|Source:||Journal of Difference Equations and Applications|
|01_Stachurski_Log-Linearization_of_2007.pdf||123.09 kB||Adobe PDF||Request a copy|
|02_Stachurski_Log-Linearization_of_2007.pdf||158.87 kB||Adobe PDF||Request a copy|