// Adapted from Jesus Fernandez-Villaverde, Basic RBC Model with Monopolistic Competion Philadelphia, March 3, 2005
var y c k i l y_l w r z;
varexo e;
parameters beta psi delta alpha rho gamma sigma epsilon;

alpha   = 0.33;
beta    = 0.99;
delta   = 0.023;
psi     = 1.75;
rho     = 0.95;
sigma   = (0.007/(1-alpha));
epsilon = 10;

model;
  (1/c) = beta*(1/c(+1))*(1+r(+1)-delta);
  psi*c/(1-l) = w;
  c+i = y;
  y = (k(-1)^alpha)*(exp(z)*l)^(1-alpha);
  w = y*((epsilon-1)/epsilon)*(1-alpha)/l;
  r = y*((epsilon-1)/epsilon)*alpha/k(-1);
  i = k-(1-delta)*k(-1);
  y_l = y/l;
  z = rho*z(-1)+e;
end;

initval;
  k = 9;
  c = 0.76;
  l = 0.3;
  w = 2.07;
  r = 0.03;
  z = 0;
  e = 0;
end;

steady;
check;

shocks;
var e = sigma^2;
end;

stoch_simul(periods=2100);