// Program for structural estimation of model 1
// as in Nov 12th draft
// Jean-Paul, Dec 25

//for i=1:40;

var c s x dc dx;

varexo eps e;

parameters sig_eps sig_e;

sig_eps = .02;
sig_e = .02;

BAYESIAN=0;
%BAYESIAN=1;


model(linear);
c = (sig_e^2/(sig_e^2+sig_eps^2+(-sig_eps^2+(sig_eps^4+4*sig_e^2*sig_eps^2)^(.5))/2))*c(-1) 
+ (1-sig_e^2/(sig_e^2+sig_eps^2+(-sig_eps^2+(sig_eps^4+4*sig_e^2*sig_eps^2)^(.5))/2))*s;
s = x + e;
x = x(-1) + sig_eps*eps;
dc = c - c(-1);
dx = x - x(-1);
end;

shocks;
var eps; stderr 1;
var e; stderr sig_e;
end;

stoch_simul(periods=211,simul_seed=1,irf=0,nomoments);

save model1data dc c s x dx;


if BAYESIAN==0;

estimated_params;
sig_eps, .02;
sig_e, .02;
end;

varobs dc;

estimation(datafile=model1data,prefilter=1,lik_init=2,nograph);

end;

if BAYESIAN==1;
    
end;
//end;