1var y c k m n R pi z u; 2varexo e sigma; 3// sigma stands for phi in the eq 2.37 p.69 4 5parameters alphha betta delta gamm phi1 eta a b rho phi2 Psi thetass; 6//phi1 stands for capital phi in eq.2.68 and 2.69 7//phi2 stands for lowercase phi in eq. 2.66 8 9alphha = 0.36; 10betta = 0.989; 11gamm = 0.5; 12delta = 0.019; 13phi1 = 2; 14phi2 = 0; 15eta = 1; 16a = 0.95; 17b = 2.56; 18rho = 0.95; 19Psi = 1.47630583; 20thetass = 1.0125; 21 22model; 23 24(a*exp(c)^(1-b)+(1-a)*exp(m)^(1-b))^((b-phi1)/(1-b))*a*exp(c)^(-b) = (a*exp(c)^(1-b)+(1-a)*exp(m)^(1-b))^((b-phi1)/(1-b))*(1-a)*exp(m)^(-b)+betta*(a*exp(c(+1))^(1-b)+(1-a)*exp(m(+1))^(1-b))^((b-phi1)/(1-b))*a*exp(c(+1))^(-b)/(1+pi(+1)); 25 26Psi*(1-exp(n))^(-eta)/(a*exp(c)^(-b)*(a*exp(c)^(1-b) + (1-a)*exp(m)^(1-b))^((b-phi1)/(1-b))) = (1-alphha)*exp(y)/exp(n); 27 28(a*exp(c)^(1-b)+(1-a)*exp(m)^(1-b))^((b-phi1)/(1-b))*a*exp(c)^(-b) = betta*exp(R(+1))*(a*exp(c(+1))^(1-b)+(1-a)*exp(m(+1))^(1-b))^((b-phi1)/(1-b))*a*exp(c(+1))^(-b); 29 30exp(R) = alphha*exp(y)/exp(k(-1)) + 1-delta; 31 32exp(k) = (1-delta)*exp(k(-1))+exp(y)-exp(c); 33 34exp(y) = exp(z)*exp(k(-1))^alphha*exp(n)^(1-alphha); 35 36exp(m) = exp(m(-1))*(u+thetass)/(1+pi); 37 38z = rho*z(-1) + e; 39 40u = gamm*u(-1) + phi2*z(-1) + sigma; 41 42end; 43 44shocks; 45var e; stderr 0.007; 46var sigma;stderr 0.0089; 47end; 48 49 50steady; 51 52