// Endogenous variables: consumption and capital var c k; // Exogenous variable: technology level varexo A; // Parameters declaration and calibration parameters alpha beta gamma delta; alpha = 0.5; beta = 0.95; gamma = 0.5; delta = 0.02; // Equilibrium conditions model; c + k = A*k(-1)^alpha + (1-delta)*k(-1); // Resource constraint c^(-gamma) = beta*c(+1)^(-gamma)*(alpha*A(+1)*k^(alpha-1) + 1 - delta); // Euler equation end; // Give an initial guess for the steady state solver initval; A = 1; k = 40; c = 5; end; // Actually compute the steady state steady; // Declare a positive technological shock in period 1 shocks; var A; periods 1; values 1.2; end; // Prepare the deterministic simulation of the model over 100 periods perfect_foresight_setup(periods=100); // Perform the simulation perfect_foresight_solver; // Display the path of consumption rplot c;