periods 2000;
var y, c, i, k, n, a, u;
varexo e;
parameters beta, alpha, sigma, delta, nu, rho;


beta=0.99;         %discount factor
alpha=0.36;        %capital's share
sigma=1;          % parameter on consumption in utility function
delta=0.025;       %depreciation
nu=1;              % parameter on labor in utility function
rho=0.95;         %AR(1) in z



model;
((exp(n))^nu)/((exp(c))^-sigma)=(1-alpha)*exp(y)/((exp(n)));
exp(y)=exp(c)+exp(i);
exp(k)=(1-delta)*exp(k(-1))+exp(i);
exp(y)=exp(a)*(exp(k(-1))^alpha)*(exp(n))^(1-alpha);
(exp(c))^-sigma = (alpha*exp(y(+1))/exp(k)+1-delta)*beta*(exp(c(+1)))^-sigma;
a=rho*a(-1)+u;
u=e;
end;

initval;
k=ln(35);
i=ln(.88);
n=ln(.9);
y=ln(3);
c=ln(2.5);
e=0;
a=0;
u=0;
end;

steady;
check;
shocks;
var e = 0.01^2;
end;
stoch_simul(irf=15);