<p>I am working on my thesis, doing a model with energy price. I am following this paper &quot;Energy Price Shocks and Financial Market Integration: Evidence from New Keynesian Model&quot;, Tarek Ghazouani, 2020.</p>
<p>I have been having troubles in log-linearizing with this equation, which is given by
<a href="https://i.sstatic.net/V7Zx8.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/V7Zx8.png" alt="enter image description here" /></a></p>
<p>è stata ottenuta massimizzando il vincolo di bilancio rispetto Ft
<a href="https://i.sstatic.net/MReyS.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/MReyS.png" alt="enter image description here" /></a>
<a href="https://i.sstatic.net/YpRKm.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/YpRKm.png" alt="enter image description here" /></a></p>
<p>These two equations are also introduced but I can't understand how they are used
<a href="https://i.sstatic.net/LU523.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/LU523.png" alt="enter image description here" /></a></p>
<p>I would appreciate very much any help.</p>
<p>Alessia</p>

CC BY-SA 4.0
2023-10-09T12:01:41.643Z
What specific problem with log-linearization you have? Just literally take natural log of both sides.
1muflon1
CC BY-SA 4.0
2023-10-09T17:52:02.657Z
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
Alessia Gigliotti
<macroeconomics><dsge><log-linearization>
how to Log-linear this equation?
Alessia Gigliotti
# how to Log-linear this equation?

(Asked by: username_0 on 2023-10-09)

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](https://i.sstatic.net/V7Zx8.png)](https://i.sstatic.net/V7Zx8.png)

è stata ottenuta massimizzando il vincolo di bilancio rispetto Ft
[![enter image description here](https://i.sstatic.net/MReyS.png)](https://i.sstatic.net/MReyS.png)
[![enter image description here](https://i.sstatic.net/YpRKm.png)](https://i.sstatic.net/YpRKm.png)

These two equations are also introduced but I can't understand how they are used
[![enter image description here](https://i.sstatic.net/LU523.png)](https://i.sstatic.net/LU523.png)

I would appreciate very much any help.

Alessia

**Tags:** macroeconomics, dsge, log-linearization

> **Comments:**
> **username_1**: What specific problem with log-linearization you have? Just literally take natural log of both sides.  
> **username_0**: 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  

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## 0 answers

