Commit e98aa4df authored by MichelJuillard's avatar MichelJuillard
Browse files

fixing problem with irreversible investment tests case ep/rbcii.mod

parent 5fdcd124
@#define extended_path_version = 1
var Capital, Output, Labour, Consumption, Investment, Efficiency, efficiency, ExpectedTerm;
var Capital, Output, Labour, Consumption, Investment, Output1, Labour1, Consumption1, Output2, Labour2, Consumption2, Efficiency, efficiency, ExpectedTerm;
varexo EfficiencyInnovation;
......@@ -30,29 +30,33 @@ external_function(name=mean_preserving_spread,nargs=2);
model;
// Eq. n°1:
efficiency = rho*efficiency(-1) + EfficiencyInnovation;
// Eq. n°2:
Efficiency = effstar*exp(efficiency-mean_preserving_spread(rho,sigma2));
// Eq. n°3:
Output = Efficiency*(alpha*(Capital(-1)^psi)+(1-alpha)*(Labour^psi))^(1/psi);
(((Consumption1^theta)*((1-Labour1)^(1-theta)))^(1-tau))/Consumption1 - ExpectedTerm(1);
// Eq. n°4:
Capital = max(Output-Consumption,0) + (1-delta)*Capital(-1);
ExpectedTerm = beta*((((Consumption^theta)*((1-Labour)^(1-theta)))^(1-tau))/Consumption)*(alpha*((Output/Capital(-1))^(1-psi))+1-delta);
// Eq. n°5:
((1-theta)/theta)*(Consumption/(1-Labour)) - (1-alpha)*(Output/Labour)^(1-psi);
((1-theta)/theta)*(Consumption1/(1-Labour1)) - (1-alpha)*(Output1/Labour1)^(1-psi);
// Eq. n°6:
ExpectedTerm = beta*((((Consumption^theta)*((1-Labour)^(1-theta)))^(1-tau))/Consumption)*(alpha*((Output/Capital(-1))^(1-psi))+1-delta);
Output1 = Efficiency*(alpha*(Capital(-1)^psi)+(1-alpha)*(Labour1^psi))^(1/psi);
// Eq. n°7:
Investment = Capital - (1-delta)*Capital(-1);
Consumption2 = Output2;
((1-theta)/theta)*(Consumption2/(1-Labour2)) - (1-alpha)*(Output2/Labour2)^(1-psi);
Output2 = Efficiency*(alpha*(Capital(-1)^psi)+(1-alpha)*(Labour2^psi))^(1/psi);
Consumption = (Output1 > Consumption1)*Consumption1 + (1-(Output1 > Consumption1))*Consumption2;
Labour = (Output1 > Consumption1)*Labour1 + (1-(Output1 > Consumption1))*Labour2;
// Eq. n°8: (Euler equation, to be skipped if investment is on its lower bound)
(Investment>0)*((((Consumption^theta)*((1-Labour)^(1-theta)))^(1-tau))/Consumption - ExpectedTerm(1)) + (1-(Investment>0))*(Output-Consumption);
Output = (Output1 > Consumption1)*Output1 + (1-(Output1 > Consumption1))*Output2;
Capital = Output-Consumption + (1-delta)*Capital(-1);
Investment = Capital - (1-delta)*Capital(-1);
end;
......@@ -76,6 +80,12 @@ Capital = Labour/Labour_per_unit_of_Capital;
Output = Output_per_unit_of_Capital*Capital;
Investment = delta*Capital;
ExpectedTerm = beta*((((Consumption^theta)*((1-Labour)^(1-theta)))^(1-tau))/Consumption)*(alpha*((Output/Capital)^(1-psi))+1-delta);
Output1 = Output;
Output2 = Output;
Labour1 = Labour;
Labour2 = Labour;
Consumption1 = Consumption;
Consumption2 = Consumption;
end;
@#if extended_path_version
......@@ -84,12 +94,12 @@ end;
var EfficiencyInnovation = sigma2;
end;
steady;
steady(nocheck);
options_.maxit_ = 100;
options_.ep.verbosity = 0;
options_.ep.stochastic.order = 0;
options_.ep.stochastic.nodes = 2;
options_.ep.stochastic.nodes = 5;
options_.console_mode = 0;
ts = extended_path([],100);
......@@ -99,8 +109,10 @@ end;
options_.ep.stochastic.order = 2;
sts2 = extended_path([],100);
options_.ep.stochastic.order = 3;
sts3 = extended_path([],100);
// options_.ep.stochastic.order = 3;
// sts3 = extended_path([],100);
save rbcii ts sts sts2 sts3;
figure(1)
plot(ts(2,:)-ts(4,:));
......@@ -112,7 +124,9 @@ end;
plot(sts(2,:)-ts(2,:))
figure(4)
plot([(ts(2,:)-ts(4,:))' (sts(2,:)-sts(4,:))' (sts2(2,:)-sts2(4,:))' (sts3(2,:)-sts3(4,:))'])
// plot([(ts(2,:)-ts(4,:))' (sts(2,:)-sts(4,:))' (sts2(2,:)-sts2(4,:))' (sts3(2,:)-sts3(4,:))'])
plot([(ts(2,:)-ts(4,:))' (sts(2,:)-sts(4,:))'])
@#else
shocks;
......
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