SW2007 flexible economy
Posted: Wed Aug 01, 2012 8:42 amHi guys, hope you can help me out on this one.
In the SW2007 model code how come that 1) there is no inflation equation and 2) why is the realwage formulated as it is?
In the SW2007 model code how come that 1) there is no inflation equation and 2) why is the realwage formulated as it is?
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// flexible economy
0*(1-calfa)*a + 1*a = calfa*rkf+(1-calfa)*(wf) ;
zcapf = (1/(czcap/(1-czcap)))* rkf ;
rkf = (wf)+labf-kf ;
kf = kpf(-1)+zcapf ;
invef = (1/(1+cbetabar*cgamma))* ( invef(-1) + cbetabar*cgamma*invef(1)+(1/(cgamma^2*csadjcost))*pkf ) +qs ;
pkf = -rrf-0*b+(1/((1-chabb/cgamma)/(csigma*(1+chabb/cgamma))))*b +(crk/(crk+(1-ctou)))*rkf(1) + ((1-ctou)/(crk+(1-ctou)))*pkf(1) ;
cf = (chabb/cgamma)/(1+chabb/cgamma)*cf(-1) + (1/(1+chabb/cgamma))*cf(+1) +((csigma-1)*cwhlc/(csigma*(1+chabb/cgamma)))*(labf-labf(+1)) - (1-chabb/cgamma)/(csigma*(1+chabb/cgamma))*(rrf+0*b) + b ;
yf = ccy*cf+ciy*invef+g + crkky*zcapf ;
yf = cfc*( calfa*kf+(1-calfa)*labf +a );
wf = csigl*labf +(1/(1-chabb/cgamma))*cf - (chabb/cgamma)/(1-chabb/cgamma)*cf(-1) ;
kpf = (1-cikbar)*kpf(-1)+(cikbar)*invef + (cikbar)*(cgamma^2*csadjcost)*qs ;
// sticky price - wage economy
mc = calfa*rk+(1-calfa)*(w) - 1*a - 0*(1-calfa)*a ;
zcap = (1/(czcap/(1-czcap)))* rk ;
rk = w+lab-k ;
k = kp(-1)+zcap ;
inve = (1/(1+cbetabar*cgamma))* ( inve(-1) + cbetabar*cgamma*inve(1)+(1/(cgamma^2*csadjcost))*pk ) +qs ;
pk = -r+pinf(1)-0*b +(1/((1-chabb/cgamma)/(csigma*(1+chabb/cgamma))))*b + (crk/(crk+(1-ctou)))*rk(1) + ((1-ctou)/(crk+(1-ctou)))*pk(1) ;
c = (chabb/cgamma)/(1+chabb/cgamma)*c(-1) + (1/(1+chabb/cgamma))*c(+1) +((csigma-1)*cwhlc/(csigma*(1+chabb/cgamma)))*(lab-lab(+1)) - (1-chabb/cgamma)/(csigma*(1+chabb/cgamma))*(r-pinf(+1) + 0*b) +b ;
y = ccy*c+ciy*inve+g + 1*crkky*zcap ;
y = cfc*( calfa*k+(1-calfa)*lab +a );
pinf = (1/(1+cbetabar*cgamma*cindp)) * ( cbetabar*cgamma*pinf(1) +cindp*pinf(-1)
+((1-cprobp)*(1-cbetabar*cgamma*cprobp)/cprobp)/((cfc-1)*curvp+1)*(mc) ) + spinf ;
w = (1/(1+cbetabar*cgamma))*w(-1)
+(cbetabar*cgamma/(1+cbetabar*cgamma))*w(1)
+(cindw/(1+cbetabar*cgamma))*pinf(-1)
-(1+cbetabar*cgamma*cindw)/(1+cbetabar*cgamma)*pinf
+(cbetabar*cgamma)/(1+cbetabar*cgamma)*pinf(1)
+(1-cprobw)*(1-cbetabar*cgamma*cprobw)/((1+cbetabar*cgamma)*cprobw)*(1/((clandaw-1)*curvw+1))*
(csigl*lab + (1/(1-chabb/cgamma))*c - ((chabb/cgamma)/(1-chabb/cgamma))*c(-1) -w)
+ 1*sw ;
r = crpi*(1-crr)*pinf
+cry*(1-crr)*(y-yf)
+crdy*(y-yf-y(-1)+yf(-1))
+crr*r(-1)
+ms ;
a = crhoa*a(-1) + ea;
b = crhob*b(-1) + eb;
g = crhog*(g(-1)) + eg + cgy*ea;
qs = crhoqs*qs(-1) + eqs;
ms = crhoms*ms(-1) + em;
spinf = crhopinf*spinf(-1) + epinfma - cmap*epinfma(-1);
epinfma=epinf;
sw = crhow*sw(-1) + ewma - cmaw*ewma(-1) ;
ewma=ew;
kp = (1-cikbar)*kp(-1)+cikbar*inve + cikbar*cgamma^2*csadjcost*qs ;