// Long and Plosser

//addpath('C:\dynare_v3\matlab')  // past this in command line prior to starting


var a k; 	   // DECLARATION OF THE ENDOGENOUS VARIABLES (Put these in alphabetical order)

varexo x z;    // DECLARATION OF THE STRUCTURAL INNOVATIONS.

parameters alph psi bet gammak gammaa; // DECLARATION OF THE DEEP PARAMETERS.

// CALIBRATION OF THE DEEP PARAMETERS  
alph=1/3;
psi=1;
bet=.99;
gammak=((1-alph)/(1+psi))*log((1-alph)/(1-bet*alph)) + log(bet*alph);
gammaa=-(alph/(1+psi))*log((1-alph)/(1-bet*alph));

// DECLARATION OF THE (LINEAR) DSGE MODEL: 
model(linear);

    a     = gammaa + alph*k(-1) + (1-alph)*z + alph/(1+psi)*x;
    k     = gammak + alph*k(-1) + (1-alph)*z - (1-alph)/(1+psi)*x;

end;


shocks;
var z;
stderr .02;
var x;
stderr .02;
end;

// stoch_simul(order=1, irf = 20 , noprint);

stoch_simul(dr_algo=0,periods=5000,simul_seed=1, noprint, irf=20);
data = y_;
save data data;