42 lines
618 B
Modula-2
42 lines
618 B
Modula-2
// Model from Kydland & Prescott JEDC 1980
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// case 1: optimal policy, in fact, optimal control
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var C G K TAU Z;
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varexo EPS;
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parameters eta beta alpha delta phi a rho;
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eta = 2;
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beta = 0.99;
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alpha = 0.3;
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delta = 0.10;
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phi = 2.5;
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a = 0.1;
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rho = 0.7;
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planner_objective C^(1-eta)/(1-eta) + a*G^(1-phi)/(1-phi);
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planner_discount beta;
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model;
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K = (1-delta)*K(-1) + (exp(Z(-1))*K(-1)^alpha - C(-1) - G(-1));
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G = TAU*alpha*K^alpha;
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Z = rho*Z(-1) + EPS;
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end;
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initval;
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TAU = 0.70;
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K = ((delta+1/beta-1)/alpha)^(1/(alpha-1));
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G = TAU*alpha*K^alpha;
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C = K^alpha - delta*K - G;
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Z = 0;
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end;
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order = 4;
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vcov = [
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0.01
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];
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