%model aghion howitt
%periods = 200;
var c k zz ee mu;
parameters beta gamma epsilon theta omega aa;
beta = 0.98;
gamma = 2;
epsilon = 2;
theta = 0.1;
omega = 2;
aa = 1;

model;
(1/(c)^epsilon)/beta = (1/(c(+1))^epsilon)*(1+aa*zz(+1))-mu(+1)*aa*(zz(+1))^(1+gamma); 
1/(c)^epsilon = mu*(1+gamma)*zz^gamma;
mu/beta = ee+(1-theta)*mu(+1);
ee = (1-theta)*ee(-1)-aa*k(-1)*zz^(gamma+1);
k = aa*k(-1)*zz-c+k(-1);
end;

endval;
zz = (1+1/gamma)/aa*((1/beta)-1);
1/(c)^epsilon = mu*(1+gamma)*(zz)^gamma;
k = c/(aa*zz);
ee = (-c/theta)*zz^gamma;
mu = beta*ee/(1-beta*(1-theta));
end;

steady;
check;

%shocks;
%var aa;
%periods 1;
%values 0.13;
%end;
%simul;
rplot c;
rplot k;