alpha   	= 0.3;				% share of capital in ouput
beta    	= 0.99;				% discount factor
gamma_p = 0.75;
theta_p = 0.75;
sigmaC		= 1.5;				% risk aversion consumption
sigmaL		= 2;				% labor disutility
rho_r 		= .9;		% Monetary Policy Smoothing Parameter
phi_ry 		= .125;		% Monetary Policy GDP Growth Target
phi_rpi 	= 1.5;		% Monetary Policy Inflation Growth Target
rho_a   	= 0.95; 			% productivity
rho_q   	= 0.95; 			% risk premium
rho_b   	= 0.85; 			% inter-temporal preference
rho_l   	= 0.85; 			% labor disutility preference

rho_g = .9;		% Expenditure Policy Smoothing Parameter
phi_gb = .2;
phi_gy = .1;		% Expenditure Policy GDP Growth Target

rho_tc = .9;		% Tax Policy Smoothing Parameter
phi_tcb = .2;		% Tax Policy Debt Growth Target
phi_tcy = 0.4; 

rho_tw = .9;		% Tax Policy Smoothing Parameter
phi_twb = .2;		% Tax Policy Debt Growth Target
phi_twy = .4;		% Tax Policy Debt Growth Target

rho_tk = .9;		% Tax Policy Smoothing Parameter
phi_tkb = .2;		% Tax Policy Debt Growth Target
phi_tky = 0.4;		% Tax Policy Debt Growth Target

phi_tr = 0.2;

psi = 0.25;

phi_rb = -0.8;

phi_tctw = 0.05;
phi_twtc = 0.05;
phi_tktc = 0.05;
phi_tctk = 0.05;
phi_twtk = 0.25;
phi_tktw = 0.25;

delta = 0.025;

% steady states
PI			= 1.005;
Q			= 1;
R			= PI/(beta*Q);
GY			= 0.18;
IY			= 0.22;
KY			= IY/delta;
CY			= 1-GY-delta*KY;
WY			= 1-alpha;
BY			= 0.6;
TC			= 0.183;
TW			= 0.122;
TK			= 0.184;
TR			= 0.195;
DY			= 0.75;
Z			= (1/beta-1+delta)/(1-TK);