% Gelain (2007), The transmission mechanism base (senza economia aperta e senza ovelapping genaration)
% ESTIMATION

%----------------------------------------------------------------
% 1. Defining variables
%----------------------------------------------------------------

var  c l inv q k nw rk r y mc pi z  a x eb el epi er S g  rn ; %ce wp
varexo ux ub ul ua upi ur ug;

parameters   CY IY GY CEY mho alpha beta delta theta R SS rhob varkappa varsigma thetae phim Xi rhol rhox rhopi rhoa rhor Rk NWK KNW rpi ry epsilon h rhog sigmal sigmac;

%----------------------------------------------------------------
% 2. Calibration
%----------------------------------------------------------------

CY=0.6; %0.568;
IY=0.1960; %.1779;
GY=0.24;
%CEY=0.0541;
alpha=0.3;
beta=0.99;
delta=0.025;
R=(1/beta);
SS=1.02;
Rk=SS*R;
KNW=1.54;
NWK=1/KNW;

%----------------------------------------------------------------
% 3. Model
%----------------------------------------------------------------

model;

y=CY*c+IY*inv+GY*g; %+CEY*ce;
c=(1/(1+h))*c(+1)+(h/(1+h))*c(-1)-((1-h)/((1+h)*sigmac))*r+((1-h)/((1+h)*sigmac))*(-(eb(+1))+eb);
rk(+1)=r-varkappa*(nw-q(-1)-k);
rk=(1-epsilon)*z+epsilon*q-q(-1);
z=mc+y-k(-1);
q=Xi*(inv-k)-x;
y=a+alpha*k(-1)+(1-alpha)*l;
y=sigmal*l-mc+((sigmac)/(1-h))*c-((sigmac)/(1-h))*c(-1)-el;
%wp=sigmal*l+((sigmac)/(1-h))*c-((sigmac)/(1-h))*c(-1)-el;
%wp=mc+y-l;
pi=varsigma*(mc)+beta*pi(+1);
k=delta*inv+delta*x+(1-delta)*k(-1);
%ce=nw(-1);
nw=thetae*KNW*R*(rk(-1)-r(-1))+r(-1)+nw(-1);
%nw=chi*rk-chi*(1-NWK)*r(-1)-chi*(1-NWK)*varkappa*k(-1)-chi*(1-NWK)*varkappa*q(-1)-chi*((1-NWK)*varkappa+NWK)*nw(-1)+((chi*(1-thetae)*NWK)/thetae)*y;
r=rn-pi(+1);
rn=phim*rn(-1)+(1-phim)*(epi+rpi*(pi(-1)-epi)+ry*y)+er; % Smets and Wouter (2003)+rpid*(pi-pi(-1))+ryd*(y-y(-1))
eb=rhob*(eb(-1))+ub;
el=rhol*(el(-1))+ul;
x=rhox*(x(-1))+ux;
a=rhoa*(a(-1))+ua;
epi=rhopi*(epi(-1))+upi;
er=rhor*(er(-1))+ur;
g=rhog*g(-1)+ug;
S=rk(+1)-r;


end;

%----------------------------------------------------------------
% 4. Computation
%----------------------------------------------------------------

estimated_params;

stderr ub, inv_gamma_pdf,0.2,0.01;
stderr ul, inv_gamma_pdf,1,0.01;
stderr ux, inv_gamma_pdf,0.1,0.01;
stderr ua, inv_gamma_pdf,0.4,0.01;
stderr upi, inv_gamma_pdf,0.02,0.01;
stderr ur, inv_gamma_pdf,0.1,0.01;
stderr ug, inv_gamma_pdf,0.3,0.01;

%stderr ub, gamma_pdf,0.155,0.05;
%stderr ul, gamma_pdf,0.032,0.05;
%stderr ux, gamma_pdf,0.1,0.01;
%stderr ua, gamma_pdf,0.008,0.005;
%stderr upi, gamma_pdf,0.02,0.01;
%stderr ur, gamma_pdf,0.002,0.01;
%stderr ug, gamma_pdf,0.017,0.005;



%stderr ub, uniform_pdf,,,0,1;
%stderr ul, uniform_pdf,,,0,1;
%stderr ux, uniform_pdf,,,0,1;
%stderr ua, uniform_pdf,,,0,1;
%stderr upi, uniform_pdf,,,0,1;
%stderr ur, uniform_pdf,,,0,1;
%stderr ug, uniform_pdf,,,0,1;
mho, beta_pdf,0.75,0.05;
theta, beta_pdf,0.7,0.05;
varkappa, uniform_pdf,,,0,1;
varsigma, normal_pdf,0.1,0.05;
thetae, beta_pdf,0.975,0.01;
phim, beta_pdf,0.8,0.05;
Xi, uniform_pdf,0.5,0.5;
rhob, uniform_pdf,,,0,1;
rhol, uniform_pdf,,,0,1;
rhox, uniform_pdf,,,0,1;
rhopi, uniform_pdf,,,0,1;
rhoa, uniform_pdf,,,0,1;
rhor, uniform_pdf,,,0,1;
rhog, uniform_pdf,,,0,1;
rpi, normal_pdf,1.7,0.1;
ry, normal_pdf,0.125,0.05;
epsilon, uniform_pdf,,,0,1;
h, beta_pdf,0.7,0.05;
sigmal, normal_pdf,2,0.75;
sigmac, normal_pdf,1,0.375;

end;

varobs y c inv l rn pi ;  %wp

estimation(datafile=datamiobasesw2,nobs=132,mh_replic=20000,mh_jscale=0.05, mh_nblocks=2, prefilter=1, bayesian_irf, irf=12);