% pages t18 and t21 
%

% Antonio Bolinches,




%----------------------------------------------------------------

% 0. Housekeeping (close all graphic windows)

%----------------------------------------------------------------


close all;




%----------------------------------------------------------------

% 1. Defining variables

%----------------------------------------------------------------


var cA cB kA kB bA bB rA rB wA wB R;
varexo AB;
parameters alpha beta psi1 psi2 psi3 psi4 AA;
//phi1 phi2




%----------------------------------------------------------------

% 2. Calibration

%----------------------------------------------------------------

alpha=0.3;
beta = 0.96;
psi1=0.1; psi2=0.1;psi3=-0.645;psi4=-1;
//phi1=2; phi2=2;
AA=1;




%----------------------------------------------------------------

% 3. Model

%----------------------------------------------------------------



model; 
  

cA+kA+bA=wA+rA*kA+R*bA;
cB+kB+bB=wB+rB*kB+R*bB;

rA=alpha*AA*kA^(alpha-1);
wA=(1-alpha)*AA*kA^alpha;

rB=alpha*AB*kB^(alpha-1);
wB=(1-alpha)*AB*kB^alpha;

bA+bB=0;


psi1/kA=-psi3+1/cA-beta*rA/cA(+1);  //psi1*phi1*kA^(phi1-1)=psi3+1/cA-beta*rA/cA(+1);
psi2/bA=-psi4+1/cA-beta*R/cA(+1);         //psi2*phi2*bA=1/cA-beta*R/cA(+1);

cB(+1)=beta*R*cB;
rB=R;

//ABplot=AB;

end;



%----------------------------------------------------------------

% 4. Computation

%----------------------------------------------------------------


initval;
  
cA=0.4; cB=0.42; kA=0.15; kB=0.19; bA=0.01; bB=-0.01; rA=1.042; rB=1.042; wA=0.41; wB=0.41; R=1.042;
AB=1;
end;



shocks;
var AB;
periods 15 16  17  18  19  20  21  22  23  24  25  26  27  28  29  30;
values 0.9 0.8 0.7 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.6 0.8 ;
end;



steady;




simul(periods=50);

plot([cA, cB]);
plot([bA, bB]);
plot([kA, kB]);
plot([rA, rB,R]);
//rplot bA bB;
//rplot kA kB;
//rplot rA rB R;
//rplot ABplot;