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### Highlights fromAutomatic Solution and Log Linearisation of DSGE Models

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# Automatic Solution and Log Linearisation of DSGE Models

06 Jun 2011 (Updated 04 Jun 2012)

Code to analytically log linearise DSGE models in Matlab. Requires the symbolic toolbox.

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Description

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PURPOSE: Performs log-linearisation.
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SYNTAX: result = LogLin( VarEndoNames, VarExoNames, Parameters, Equations, SolveMode, EvalMode, EvalString, Digits );
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EXAMPLE: result = LogLin( { 'R', 'A' }, { 'EPSILON' }, { 'beta', 'rho' }, { 'beta * R * A / A(+1) = 1', 'A = A(-1) ^ rho * exp( EPSILON )' }, 2, 2 );
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OUTPUT: result: a cell array of log-linearised equations, with __d appended to variable names that are deviations from steady state.
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INPUT: VarEndoNames: a cell array of endogenous variable names
% VarExoNames: a cell array of exogenous variable names
% Parameters: a cell array of parameter names
% Equations: a cell array of equations, in Dynare notation
% SolveMode: specifies how the steady state is found
% SolveMode = 1 ---> the steady state is found analytically
% SolveMode = 2 ---> the steady state is found analytically, allowing all algebraic manipulations
% SolveMode = 3 ---> the steady state is found analytically, assuming real values
% SolveMode = 4 ---> the steady state is found numerically
% EvalMode: specifies any processing of the found equations
% EvalMode = 0 ---> no additional processing
% EvalMode = 1 ---> simplification
% EvalMode = 2 ---> simplification, allowing all algebraic manipulations
% EvalMode = 3 ---> numeric evaluation, to Digits precision
% EvalString: string of comma delimited equations, useful for specifying parameters or your own computed steady state values (e.g. 'beta=0.99,rho=1/2', or 'A=1')
Digits: (optional) the number of digits of accuracy for numerical compuations
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Required Products Symbolic Math Toolbox
MATLAB release MATLAB 7.12 (R2011a)
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12 Feb 2013

I personally use Dynare almost exclusively. This is just for the rare times when people on insist on working with a log-linearised model.

12 Feb 2013

What's the difference (advantage or disadvantage), between this model and dynare, do you recomend to use it for large DSGE models, does it provide a log-linearization result as equation.

06 Jun 2011

Removed mention of GPL from description.

01 Dec 2011

Typo correction (6 arguments are OK).

04 Jun 2012

Previous uploaded file accidentally contained both old and new code.