gemCanonicalDynamicMacroeconomic_Sequential_3_2: A Canonical Dynamic Macroeconomic General Equilibrium Model...

In GE: General Equilibrium Modeling

A Canonical Dynamic Macroeconomic General Equilibrium Model in Sequential Form (see Torres, 2016)

Description

A canonical dynamic macroeconomic general equilibrium model in sequential form (see Torres, 2016, Table 2.1 and 2.2).

Usage

gemCanonicalDynamicMacroeconomic_Sequential_3_2(
  alpha.firm = 1,
  es.prod.lab.firm = 1,
  beta.prod.firm = 0.35,
  depreciation.rate = 0.06,
  eis = 1,
  rho.beta = 0.97,
  es.prod.lab.consumer = 1,
  beta.prod.consumer = 0.4,
  gr = 0,
  wage.payment = "post",
  ...
)

Arguments

alpha.firm	a positive scalar, indicating the efficiency parameter of the firm.
es.prod.lab.firm	the elasticity of substitution between product and labor in the production function of firm 1.
beta.prod.firm	the share parameter of the product in the production function.
depreciation.rate	the physical depreciation rate of capital stock.
eis	the elasticity of intertemporal substitution of the consumer.
rho.beta	the subjective discount factor of the consumer.
es.prod.lab.consumer	the elasticity of substitution between product and labor in the CES-type period utility function of the consumer.
beta.prod.consumer	the share parameter of the product in the period utility function.
gr	the growth rate of the labor supply.
wage.payment	a character string specifying the wage payment method, must be one of "pre" or "post". See the note below.
...	arguments to be passed to the function sdm2.

Value

A general equilibrium (see sdm2).

Note

In the timeline model and the time-circle model, we refer to the labor provided in period t as labor t, and the product produced by using labor t as product t+1. When the consumer's period utility function simultaneously includes labor (or leisure) and product, we can choose from one of two assumptions: it can be assumed that the period utility function of the consumer in period $t$ includes labor $t$ and product $t$, or it can be assumed that it includes labor $t$ and product $t+1$. These two assumptions are respectively referred to as the wage prepayment assumption and the wage postpayment assumption.

See Also

gemCanonicalDynamicMacroeconomic_Timeline_2_2,
gemCanonicalDynamicMacroeconomic_TimeCircle_2_2,
gemCanonicalDynamicMacroeconomic_Sequential_WagePostpayment_4_3.

Examples

#### Take the wage postpayment assumption.
ge <- gemCanonicalDynamicMacroeconomic_Sequential_3_2()
ge$p
ge$z
addmargins(ge$D, 2)
addmargins(ge$S, 2)

#### Take the wage prepayment assumption.
ge <- gemCanonicalDynamicMacroeconomic_Sequential_3_2(wage.payment  = "pre")
ge$p
ge$z
ge$D
ge$S

#### Take the wage prepayment assumption.
ge <- gemCanonicalDynamicMacroeconomic_Sequential_3_2(
  es.prod.lab.firm = 0.8,
  eis = 0.8, es.prod.lab.consumer = 0.8, gr = 0.03,
  wage.payment  = "pre"
)
ge$p
ge$z
ge$D
ge$S

#### an example of steady-state equilibrium at
# http://gecon.r-forge.r-project.org/models/rbc.pdf
ge <- gemCanonicalDynamicMacroeconomic_Sequential_3_2(
  beta.prod.firm = 0.36,
  depreciation.rate = 0.025,
  rho.beta = 0.99,
  eis = 0.5,
  beta.prod.consumer = 0.3,
)

ge$p / ge$p[1]
addmargins(ge$D, 2)
addmargins(ge$S, 2)

GE documentation built on Nov. 8, 2023, 9:07 a.m.