//This mod-file tests the value of the objective function in the presence of non-stationary variables Var p_U_Hat pi_U_Hat r_Hat r_Gap r_Eff realrate_U_Hat realrate_U_Eff realrate_U_Gap c_U_Gap c_U_Eff c_U_Hat g_U_Gap g_U_Eff g_U_Hat y_U_Gap y_U_Eff y_U_Hat l_U_Gap l_U_Eff l_U_Hat a_U_Hat p_A_Hat pc_A_Hat tt_A_Hat tt_A_Gap tt_A_Eff pi_A_Hat pic_A_Hat c_A_Gap c_A_Eff c_A_Hat g_A_Gap g_A_Eff g_A_Hat realrate_A_Hat l_A_Gap l_A_Eff l_A_Hat muW_A_Hat y_A_Gap y_A_Eff y_A_Hat a_A_Hat mc_A_Hat tau_A_Hat tau_A_Gap tau_A_Eff Kdebt_A p_B_Hat pc_B_Hat tt_B_Hat tt_B_Gap tt_B_Eff pi_B_Hat pic_B_Hat c_B_Gap c_B_Eff c_B_Hat g_B_Gap g_B_Eff g_B_Hat realrate_B_Hat l_B_Gap l_B_Eff l_B_Hat muW_B_Hat y_B_Gap y_B_Eff y_B_Hat a_B_Hat mc_B_Hat tau_B_Hat tau_B_Gap tau_B_Eff Kdebt_B ; %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%DECLARATION OF EXOGENOUS VARIABLES%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% Varexo eps_muW_A eps_a_A eps_muW_B eps_a_B ; %%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%DECLARATION OF PARAMETERS%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%% parameters n alpha beta rho lambdaA lambdaB sigma chi psi epsilon muP gamma ell phi_GY phi_caps theta_A theta_B phi_A phi_B %%%%%% //Rule Parameters ruleR_U_y ruleR_U_pi ruleR_U_debt ruleG_A_y ruleG_A_tt ruleG_A_debt ruleG_B_y ruleG_B_tt ruleG_B_debt ruleT_A_y ruleT_A_tt ruleT_A_debt ruleT_B_y ruleT_B_tt ruleT_B_debt %%%%%% rho_a_A rho_a_B rho_muW_A rho_muW_B rho_mp r_SS muW_SS tau_A_SS DebtOutput_A_SS tau_B_SS DebtOutput_B_SS ; %%%%%%%%%%%%%%%%%%%%%%%% %%SET PARAMETER VALUES%% %%%%%%CALIBRATION%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%% n = 0.5; alpha = 0.4; beta = 0.99 ; rho = -log(beta); lambdaA = 1-(1-n)*alpha; lambdaB = 1-n*alpha; sigma = 0.4; chi = 3; psi = 0.4; epsilon = 11; muP = 1/(epsilon - 1); gamma = 4.5; ell = 11; phi_GY = 0.25; phi_caps = alpha*(gamma-(1-alpha)*(-gamma+sigma)); theta_A = 0.75; theta_B = 0.75; phi_A = (1 - theta_A*beta)*(1 - theta_A)/(theta_A*(1 + epsilon*chi)); phi_B = (1 - theta_B*beta)*(1 - theta_B)/(theta_B*(1 + epsilon*chi)); //Rule Parameters ruleR_U_y = 0.5; ruleR_U_pi = 1.5; ruleR_U_debt = 0; ruleG_A_y = 0; ruleG_A_tt = 0; ruleG_A_debt = -0.05; ruleG_B_y = ruleG_A_y; ruleG_B_tt = 0; ruleG_B_debt = ruleG_A_debt; ruleT_A_y = 0; ruleT_A_tt = 0; ruleT_A_debt = 0.05; ruleT_B_y = ruleT_A_y; ruleT_B_tt = 0; ruleT_B_debt = ruleT_A_debt; %%%%%%%%%%%%%%%%%%%%%%%%%%%%% rho_a_A = 0.85; rho_a_B = 0.85; rho_muW_A = 0; rho_muW_B = 0; rho_mp = 0; %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%% STEADY STATE VALUES %%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% muW_SS = 1/(ell - 1); r_SS = log(1/beta); DebtOutput_A_SS = 4*0.6; DebtOutput_B_SS = 4*0.6; tau_A_SS = phi_GY + r_SS*DebtOutput_A_SS; tau_B_SS = phi_GY + r_SS*DebtOutput_B_SS; model(linear); p_U_Hat = n*p_A_Hat + (1-n)*p_B_Hat; pi_U_Hat = n*pi_A_Hat + (1-n)*pi_B_Hat; c_U_Gap = c_U_Gap(+1)- sigma*(r_Gap - pi_U_Hat(+1)); realrate_U_Gap = realrate_U_Hat - realrate_U_Eff; realrate_U_Eff = ((1 + chi)/(1 + chi*(phi_GY*psi + (1 - phi_GY)*sigma)))*(a_U_Hat(+1) - a_U_Hat); realrate_U_Hat = r_Hat - pi_U_Hat(+1); r_Eff = ((1 + chi)/(1 + chi*(phi_GY*psi + (1 - phi_GY)*sigma)))*(a_U_Hat(+1) - a_U_Hat); r_Hat = r_Gap + r_Eff; // Interest rate rule r_Gap = ruleR_U_y*y_U_Gap(-1) + ruleR_U_pi*pi_U_Hat(-1) + ruleR_U_debt*(n*Kdebt_A(-1) + (1-n)*Kdebt_B(-1)); c_U_Gap = n*c_A_Gap + (1-n)*c_B_Gap; c_U_Eff = n*c_A_Eff + (1-n)*c_B_Eff; c_U_Hat = n*c_A_Hat + (1-n)*c_B_Hat; g_U_Gap = n*g_A_Gap + (1-n)*g_B_Gap; g_U_Eff = n*g_A_Eff + (1-n)*g_B_Eff; g_U_Hat = n*g_A_Hat + (1-n)*g_B_Hat; y_U_Gap = n*y_A_Gap + (1-n)*y_B_Gap; y_U_Eff = n*y_A_Eff + (1-n)*y_B_Eff; y_U_Hat = n*y_A_Hat + (1-n)*y_B_Hat; l_U_Gap = n*l_A_Gap + (1-n)*l_B_Gap; l_U_Eff = n*l_A_Eff + (1-n)*l_B_Eff; l_U_Hat = n*l_A_Hat + (1-n)*l_B_Hat; a_U_Hat = n*a_A_Hat + (1-n)*a_B_Hat; tt_A_Hat = (p_U_Hat - p_A_Hat)/(1-n); pi_A_Hat = p_A_Hat - p_A_Hat(-1); pic_A_Hat = pc_A_Hat - pc_A_Hat(-1); pic_A_Hat = pi_A_Hat + (1-lambdaA)*(tt_A_Hat - tt_A_Hat(-1)); c_A_Eff = (((1 + chi)*sigma)/(1 + chi*(phi_GY*psi + (1 - phi_GY)*sigma)))*a_U_Hat + (((1 - alpha)*(1 + chi)*sigma)/(1 + chi*(phi_GY*psi + (1 - phi_GY)*(gamma + (sigma - gamma)*(1 - 2*alpha + alpha*alpha)))))*(a_A_Hat - a_U_Hat); g_A_Eff = (((1 + chi)*psi)/(1 + chi*(phi_GY*psi + (1 - phi_GY)*sigma)))*a_U_Hat + (((1 + chi)*psi)/(1 + chi*(phi_GY*psi + (1 - phi_GY)*(gamma + (sigma - gamma)*(1 - 2*alpha + alpha*alpha)))))*(a_A_Hat - a_U_Hat); y_A_Eff = (((1 + chi)*(phi_GY*psi + (1 - phi_GY)*sigma))/(1 + chi*(phi_GY*psi + (1 - phi_GY)*sigma)))*a_U_Hat + (((1 + chi)*(phi_GY*psi + (1 - phi_GY)*(gamma + (sigma - gamma)*(1 - 2*alpha + alpha*alpha))))/(1 + chi*(phi_GY*psi + (1 - phi_GY)*(gamma + (sigma - gamma)*(1 - 2*alpha + alpha*alpha)))))*(a_A_Hat - a_U_Hat); l_A_Eff = y_A_Eff - a_A_Hat; realrate_A_Hat = r_Hat - pic_A_Hat(+1); tt_A_Gap = tt_A_Hat - tt_A_Eff; tt_A_Eff = ((1 + chi)/(1 + chi*(phi_GY*psi + (1 - phi_GY)*(gamma + (sigma - gamma)*(1 - 2*alpha + alpha*alpha)))))*((a_A_Hat - a_U_Hat)/(1-n)); y_A_Gap = l_A_Gap; pi_A_Hat = beta*pi_A_Hat(+1)+ phi_A*mc_A_Hat; mc_A_Hat = tau_A_Gap/(1 - tau_A_SS) +(chi + 1/((1- phi_GY)*(phi_caps+sigma*(1-alpha))))* y_A_Gap - (phi_GY /((1- phi_GY)*(phi_caps+sigma*(1-alpha))))*g_A_Gap + (1/(sigma*(1- phi_GY))- 1/((1- phi_GY)*(phi_caps+sigma*(1-alpha))))* y_U_Gap - phi_GY *(1/(sigma*(1 - phi_GY)) - 1/((1- phi_GY)*(phi_caps+sigma*(1-alpha))))*g_U_Gap; tau_A_Hat = tau_A_Gap + tau_A_Eff; tau_A_Eff = - (1 - tau_A_SS)*muW_A_Hat; y_A_Gap = (1- phi_GY)*c_U_Gap + (1 - phi_GY)*(sigma*(1 - alpha) + phi_caps)*(1-n)*tt_A_Gap + phi_GY*g_A_Gap; Kdebt_A - ((1 + r_SS)/r_SS)*(tau_A_SS - phi_GY)*r_Hat= (1/beta)*(Kdebt_A(-1) - ((1 + r_SS)/r_SS)*(tau_A_SS - phi_GY)*pi_A_Hat + (phi_GY*g_A_Gap - tau_A_SS*y_A_Gap - tau_A_Gap)) + (1/beta)*(phi_GY*g_A_Eff - tau_A_SS*y_A_Eff + (1 - tau_A_SS)*muW_A_Hat) + (1/beta)*((1 + r_SS)/r_SS)*(tau_A_SS - phi_GY)*alpha*(1-n)*(tt_A_Gap(-1) -(1/(1 + r_SS))*tt_A_Gap) + (1/beta)*((1 + r_SS)/r_SS)*(tau_A_SS - phi_GY)*alpha*(1-n)*(tt_A_Eff(-1) -(1/(1 + r_SS))*tt_A_Eff); //FISCAL RULES g_A_Gap = ruleG_A_y*(y_A_Gap(-1) - y_U_Gap(-1)) + ruleG_A_tt*tt_A_Gap(-1) + ruleG_A_debt*Kdebt_A(-1); tau_A_Gap = ruleT_A_y*(y_A_Gap(-1) - y_U_Gap(-1)) + ruleT_A_tt*tt_A_Gap(-1)+ ruleT_A_debt*Kdebt_A(-1); c_A_Hat = c_A_Gap + c_A_Eff; g_A_Hat = g_A_Gap + g_A_Eff; y_A_Hat = y_A_Gap + y_A_Eff; l_A_Hat = l_A_Gap + l_A_Eff; tt_B_Hat = (p_U_Hat - p_B_Hat)/n; pi_B_Hat = p_B_Hat - p_B_Hat(-1); pic_B_Hat = pc_B_Hat - pc_B_Hat(-1); pic_B_Hat = pi_B_Hat + (1-lambdaB)*(tt_B_Hat - tt_B_Hat(-1)); c_B_Eff = (((1 + chi)*sigma)/(1 + chi*(phi_GY*psi + (1 - phi_GY)*sigma)))*a_U_Hat + (((1 - alpha)*(1 + chi)*sigma)/(1 + chi*(phi_GY*psi + (1 - phi_GY)*(gamma + (sigma - gamma)*(1 - 2*alpha + alpha*alpha)))))*(a_B_Hat - a_U_Hat); g_B_Eff = (((1 + chi)*psi)/(1 + chi*(phi_GY*psi + (1 - phi_GY)*sigma)))*a_U_Hat + (((1 + chi)*psi)/(1 + chi*(phi_GY*psi + (1 - phi_GY)*(gamma + (sigma - gamma)*(1 - 2*alpha + alpha*alpha)))))*(a_B_Hat - a_U_Hat); y_B_Eff = (((1 + chi)*(phi_GY*psi + (1 - phi_GY)*sigma))/(1 + chi*(phi_GY*psi + (1 - phi_GY)*sigma)))*a_U_Hat + (((1 + chi)*(phi_GY*psi + (1 - phi_GY)*(gamma + (sigma - gamma)*(1 - 2*alpha + alpha*alpha))))/(1 + chi*(phi_GY*psi + (1 - phi_GY)*(gamma + (sigma - gamma)*(1 - 2*alpha + alpha*alpha)))))*(a_B_Hat - a_U_Hat); l_B_Eff = y_B_Eff - a_B_Hat; realrate_B_Hat = r_Hat - pic_B_Hat(+1); c_A_Gap = c_B_Gap + sigma*(1 - alpha)*((1-n)*tt_A_Gap-n*(tt_B_Gap)); tt_B_Gap = tt_B_Hat - tt_B_Eff; tt_B_Eff = ((1 + chi)/(1 + chi*(phi_GY*psi + (1 - phi_GY)*(gamma + (sigma - gamma)*(1 - 2*alpha + alpha*alpha)))))*((a_B_Hat - a_U_Hat)/n); y_B_Gap = l_B_Gap; //l_B_Gap = y_B_Gap + z_B , up to a first order approximation z_B=0 pi_B_Hat = beta*pi_B_Hat(+1)+ phi_B*mc_B_Hat; mc_B_Hat = tau_B_Gap/(1 - tau_B_SS) +(chi + 1/((1- phi_GY)*(phi_caps+sigma*(1-alpha))))* y_B_Gap - (phi_GY /((1- phi_GY)*(phi_caps+sigma*(1-alpha))))*g_B_Gap + (1/(sigma*(1- phi_GY))- 1/((1- phi_GY)*(phi_caps+sigma*(1-alpha))))* y_U_Gap - phi_GY *(1/(sigma*(1 - phi_GY)) - 1/((1- phi_GY)*(phi_caps+sigma*(1-alpha))))*g_U_Gap; tau_B_Hat = tau_B_Gap + tau_B_Eff; tau_B_Eff = - (1 - tau_B_SS)*muW_B_Hat; y_B_Gap = (1- phi_GY)*c_U_Gap + (1 - phi_GY)*(sigma*(1 - alpha) + phi_caps)*n*tt_B_Gap + phi_GY*g_B_Gap; Kdebt_B - ((1 + r_SS)/r_SS)*(tau_B_SS - phi_GY)*r_Hat= (1/beta)*(Kdebt_B(-1) - ((1 + r_SS)/r_SS)*(tau_B_SS - phi_GY)*pi_B_Hat + (phi_GY*g_B_Gap - tau_B_SS*y_B_Gap - tau_B_Gap)) + (1/beta)*(phi_GY*g_B_Eff - tau_B_SS*y_B_Eff + (1 - tau_B_SS)*muW_B_Hat) + (1/beta)*((1 + r_SS)/r_SS)*(tau_B_SS - phi_GY)*alpha*n*(tt_B_Gap(-1) -(1/(1 + r_SS))*tt_B_Gap) + (1/beta)*((1 + r_SS)/r_SS)*(tau_B_SS - phi_GY)*alpha*n*(tt_B_Eff(-1) -(1/(1 + r_SS))*tt_B_Eff); //FISCAL RULES g_B_Gap = ruleG_B_y*(y_B_Gap(-1) - y_U_Gap(-1)) + ruleG_B_tt*tt_B_Gap(-1) + ruleG_B_debt*Kdebt_B(-1); // function of domestic inflation since government spending is oriented only to domestic production tau_B_Gap = ruleT_B_y*(y_B_Gap(-1) - y_U_Gap(-1)) + ruleT_B_tt*tt_B_Gap(-1) + ruleT_B_debt*Kdebt_B(-1); // function of domenstic inflation(!?) c_B_Hat = c_B_Gap + c_B_Eff; g_B_Hat = g_B_Gap + g_B_Eff; y_B_Hat = y_B_Gap + y_B_Eff; l_B_Hat = l_B_Gap + l_B_Eff; %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%% Exogenous processes %%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% a_A_Hat = rho_a_A* a_A_Hat(-1) + eps_a_A; a_B_Hat = rho_a_B* a_B_Hat(-1) + eps_a_B; muW_A_Hat = rho_muW_A*muW_A_Hat(-1) + eps_muW_A; muW_B_Hat = rho_muW_B*muW_B_Hat(-1) + eps_muW_B; end; shocks; var eps_a_B; stderr 1; var eps_a_A; stderr 1; var eps_muW_B; stderr 1; var eps_muW_A; stderr 1; end; steady; //check; //do not use this command under optimal policy!!! //stoch_simul(order=1, irf=100); %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %Optimized Simple Rule (osr) %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% optim_weights; //for country A pi_A_Hat (1/2)*n*(epsilon/phi_A); c_A_Gap (1/2)*n*(1 - phi_GY)*(1/sigma + (1 - phi_GY)*chi); g_A_Gap (1/2)*n*phi_GY*(1/psi + phi_GY*chi); tt_A_Gap (1/2)*n*(1 - phi_GY)*(gamma*alpha*(alpha - 2) + 2*phi_caps + (1 - phi_GY)*(phi_caps^2)*chi)*((1-n)^2); c_A_Gap, g_A_Gap (1/2)*(1/2)*n*2*phi_GY*(1 - phi_GY)*chi; c_A_Gap, tt_A_Gap (1/2)*(1/2)*n*(1 - phi_GY)*(2*alpha + 2*(1 - phi_GY)*phi_caps*chi)*(1-n); g_A_Gap, tt_A_Gap (1/2)*(1/2)*n*2*phi_GY*(1 - phi_GY)*phi_caps*chi*(1-n); g_A_Gap, c_A_Gap (1/2)*(1/2)*n*2*phi_GY*(1 - phi_GY)*chi; tt_A_Gap, c_A_Gap (1/2)*(1/2)*n*(1 - phi_GY)*(2*alpha + 2*(1 - phi_GY)*phi_caps*chi)*(1-n); tt_A_Gap, g_A_Gap (1/2)*(1/2)*n*2*phi_GY*(1 - phi_GY)*phi_caps*chi*(1-n); //now, the same for country B pi_B_Hat (1/2)*(1-n)*(epsilon/phi_B); c_B_Gap (1/2)*(1-n)*(1 - phi_GY)*(1/sigma + (1 - phi_GY)*chi); g_B_Gap (1/2)*(1-n)*phi_GY*(1/psi + phi_GY*chi); tt_B_Gap (1/2)*(1-n)*(1 - phi_GY)*(gamma*alpha*(alpha - 2) + 2*phi_caps + (1 - phi_GY)*(phi_caps^2)*chi)*(n^2); c_B_Gap, g_B_Gap (1/2)*(1/2)*(1-n)*2*phi_GY*(1 - phi_GY)*chi; c_B_Gap, tt_B_Gap (1/2)*(1/2)*(1-n)*(1 - phi_GY)*(2*alpha + 2*(1 - phi_GY)*phi_caps*chi)*n; g_B_Gap, tt_B_Gap (1/2)*(1/2)*(1-n)*2*phi_GY*(1 - phi_GY)*phi_caps*chi*n; g_B_Gap, c_B_Gap (1/2)*(1/2)*(1-n)*2*phi_GY*(1 - phi_GY)*chi; tt_B_Gap, c_B_Gap (1/2)*(1/2)*(1-n)*(1 - phi_GY)*(2*alpha + 2*(1 - phi_GY)*phi_caps*chi)*n; tt_B_Gap, g_B_Gap (1/2)*(1/2)*(1-n)*2*phi_GY*(1 - phi_GY)*phi_caps*chi*n; end; osr_params ruleR_U_y ruleR_U_pi ruleR_U_debt ruleG_A_y ruleG_A_tt ruleG_A_debt ruleG_B_y ruleG_B_tt ruleG_B_debt ruleT_A_y ruleT_A_tt ruleT_A_debt ruleT_B_y ruleT_B_tt ruleT_B_debt ; osr(irf=5,maxit=10000, nograph, silent_optimizer,nofunctions); %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% asymptotic_loss=((1/2)*n*(epsilon/phi_A))... *oo_.var(strmatch('pi_A_Hat',M_.endo_names,'exact'),strmatch('pi_A_Hat',M_.endo_names,'exact'))+... ((1/2)*n*(1 - phi_GY)*(1/sigma + (1 - phi_GY)*chi))... *oo_.var(strmatch('c_A_Gap',M_.endo_names,'exact'),strmatch('c_A_Gap',M_.endo_names,'exact'))+... ((1/2)*n*phi_GY*(1/psi + phi_GY*chi))... *oo_.var(strmatch('g_A_Gap',M_.endo_names,'exact'),strmatch('g_A_Gap',M_.endo_names,'exact'))+... ((1/2)*n*(1 - phi_GY)*(gamma*alpha*(alpha - 2) + 2*phi_caps + (1 - phi_GY)*(phi_caps^2)*chi)*((1-n)^2))... *oo_.var(strmatch('tt_A_Gap',M_.endo_names,'exact'),strmatch('tt_A_Gap',M_.endo_names,'exact'))+... ((1/2)*(1/2)*n*2*phi_GY*(1 - phi_GY)*chi)... *oo_.var(strmatch('c_A_Gap',M_.endo_names,'exact'),strmatch('g_A_Gap',M_.endo_names,'exact'))+... ((1/2)*(1/2)*n*(1 - phi_GY)*(2*alpha + 2*(1 - phi_GY)*phi_caps*chi)*(1-n))... *oo_.var(strmatch('c_A_Gap',M_.endo_names,'exact'),strmatch('tt_A_Gap',M_.endo_names,'exact'))+... ((1/2)*(1/2)*n*2*phi_GY*(1 - phi_GY)*phi_caps*chi*(1-n))... *oo_.var(strmatch('g_A_Gap',M_.endo_names,'exact'),strmatch('tt_A_Gap',M_.endo_names,'exact'))+... ((1/2)*(1/2)*n*2*phi_GY*(1 - phi_GY)*chi)... *oo_.var(strmatch('g_A_Gap',M_.endo_names,'exact'),strmatch('c_A_Gap',M_.endo_names,'exact'))+... ((1/2)*(1/2)*n*(1 - phi_GY)*(2*alpha + 2*(1 - phi_GY)*phi_caps*chi)*(1-n))... *oo_.var(strmatch('tt_A_Gap',M_.endo_names,'exact'),strmatch('c_A_Gap',M_.endo_names,'exact'))+... ((1/2)*(1/2)*n*2*phi_GY*(1 - phi_GY)*phi_caps*chi*(1-n))... *oo_.var(strmatch('tt_A_Gap',M_.endo_names,'exact'),strmatch('g_A_Gap',M_.endo_names,'exact'))+... ((1/2)*(1-n)*(epsilon/phi_B))... *oo_.var(strmatch('pi_B_Hat',M_.endo_names,'exact'),strmatch('pi_B_Hat',M_.endo_names,'exact'))+... ((1/2)*(1-n)*(1 - phi_GY)*(1/sigma + (1 - phi_GY)*chi))... *oo_.var(strmatch('c_B_Gap',M_.endo_names,'exact'),strmatch('c_B_Gap',M_.endo_names,'exact'))+... ((1/2)*(1-n)*phi_GY*(1/psi + phi_GY*chi))... *oo_.var(strmatch('g_B_Gap',M_.endo_names,'exact'),strmatch('g_B_Gap',M_.endo_names,'exact'))+... ((1/2)*(1-n)*(1 - phi_GY)*(gamma*alpha*(alpha - 2) + 2*phi_caps + (1 - phi_GY)*(phi_caps^2)*chi)*(n^2))... *oo_.var(strmatch('tt_B_Gap',M_.endo_names,'exact'),strmatch('tt_B_Gap',M_.endo_names,'exact'))+... ((1/2)*(1/2)*(1-n)*2*phi_GY*(1 - phi_GY)*chi)... *oo_.var(strmatch('c_B_Gap',M_.endo_names,'exact'),strmatch('g_B_Gap',M_.endo_names,'exact'))+... ((1/2)*(1/2)*(1-n)*(1 - phi_GY)*(2*alpha + 2*(1 - phi_GY)*phi_caps*chi)*n)... *oo_.var(strmatch('c_B_Gap',M_.endo_names,'exact'),strmatch('tt_B_Gap',M_.endo_names,'exact'))+... ((1/2)*(1/2)*(1-n)*2*phi_GY*(1 - phi_GY)*phi_caps*chi*n)... *oo_.var(strmatch('g_B_Gap',M_.endo_names,'exact'),strmatch('tt_B_Gap',M_.endo_names,'exact'))+... ((1/2)*(1/2)*(1-n)*2*phi_GY*(1 - phi_GY)*chi)... *oo_.var(strmatch('g_B_Gap',M_.endo_names,'exact'),strmatch('c_B_Gap',M_.endo_names,'exact'))+... ((1/2)*(1/2)*(1-n)*(1 - phi_GY)*(2*alpha + 2*(1 - phi_GY)*phi_caps*chi)*n)... *oo_.var(strmatch('tt_B_Gap',M_.endo_names,'exact'),strmatch('c_B_Gap',M_.endo_names,'exact'))+... ((1/2)*(1/2)*(1-n)*2*phi_GY*(1 - phi_GY)*phi_caps*chi*n)... *oo_.var(strmatch('tt_B_Gap',M_.endo_names,'exact'),strmatch('g_B_Gap',M_.endo_names,'exact')); if abs(asymptotic_loss-oo_.osr.objective_function)>1e-10 error('Objective Function with Non-stationary Variables is wrong') end