//Version V3 var log_c log_n1 log_n2 log_l1 delta log_y log_z log_A log_w1 log_w2; varexo eta eta3; external_function(name=display); parameters beta rho rho2 rho3 rho4 epsilon xi MeanZ MeanAlpha MeanA MeanGamma popn log_alpha log_gamma thetta thetap ; beta=.95; epsilon = 2; xi=2; popn=1; MeanZ=.5; MeanAlpha=3; MeanA=1; MeanGamma=1; log_alpha=log(MeanAlpha); log_gamma=log(MeanGamma); thetta=2; thetap=1; rho = 0.9; rho2=0.95; rho3=0.90; rho4=.95; display(0.12^(thetta-1)); display(0.12^(2-1)); model; // MRS between labor(s) and exp(log_c)onsumption exp(log_z)^(1/xi)*(exp(log_A)^(xi-1)*exp(log_y)/(exp(log_l1(-1))*exp(log_n1)))^(1/xi)=exp(log_c)*exp(log_gamma)*exp(log_n1)^(1/epsilon); (1-exp(log_z))^(1/xi)*(exp(log_A)^(xi-1)*exp(log_y)/((popn-exp(log_l1(-1)))*exp(log_n2)))^(1/xi)=exp(log_c)*exp(log_gamma)*exp(log_n2)^(1/epsilon); //Firm MPLs exp(log_w1)-(exp(log_z)*exp(log_A)^(xi-1)*exp(log_y)/(exp(log_l1(-1))*exp(log_n1)))^(1/xi); exp(log_w2)-((1-exp(log_z))*exp(log_A)^(xi-1)*exp(log_y)/((popn-exp(log_l1(-1)))*exp(log_n2)))^(1/xi); //EE delta^(2-1)*exp(log_alpha)*thetta=exp(log_c)*beta*( -exp(log_gamma(+1))*epsilon/(1+epsilon)*(exp(log_n1(+1))^((1+epsilon)/epsilon)-exp(log_n2(+1))^((1+epsilon)/epsilon)) +thetta*exp(log_alpha(+1))*delta(+1)^(thetta-1)/exp(log_c(+1)) +(exp(log_z(+1))^(1/xi)*exp(log_n1(+1))*(exp(log_A(+1))^(xi-1)*exp(log_y(+1))/(exp(log_l1)*exp(log_n1(+1))))^(1/xi) -(1-exp(log_z(+1)))^(1/xi)*exp(log_n2(+1))*(exp(log_A(+1))^(xi-1)*exp(log_y(+1))/((popn-exp(log_l1))*exp(log_n2(+1))))^(1/xi))/exp(log_c(+1)) ); // Production fcn exp(log_y)=exp(log_A)*(exp(log_z)^(1/xi)*(exp(log_n1)*exp(log_l1(-1)))^((xi-1)/xi) +(1-exp(log_z))^(1/xi)*(exp(log_n2)*(popn-exp(log_l1(-1))))^((xi-1)/xi))^(xi/(xi-1)); // Budget constraint exp(log_c)+exp(log_alpha)*delta^(thetta)=exp(log_y); // Law of motion exp(log_l1)=exp(log_l1(-1))+delta; // EXOGENOUS PROCESS FOR TECHNOLOGY log_z=log(MeanZ)*(1-rho)+rho*log_z(-1)+eta; log_A=log(MeanA)*(1-rho3)+rho3*log_A(-1)+eta3; end; initval; @#for num in [ "1", "2" ] log_n@{num}=log(1); @#endfor delta=0; log_l1=log(popn/2); end; shocks; var eta3; stderr .01; var eta ; stderr .01; end; resid; steady; stoch_simul(hp_filter=1600, irf=30, periods=200, ar=1, nocorr,order=1);