gemCanonicalDynamicMacroeconomic_TimeCircle_2_2: A Canonical Dynamic Macroeconomic General Equilibrium Model...

In GE: General Equilibrium Modeling

A Canonical Dynamic Macroeconomic General Equilibrium Model in Time-circle Form (see Torres, 2016)

Description

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

Usage

gemCanonicalDynamicMacroeconomic_TimeCircle_2_2(
  alpha.firm = rep(1, 3),
  es.prod.lab.firm = 1,
  beta.prod.firm = 0.35,
  depreciation.rate = 0.06,
  eis = 1,
  rho.beta = 0.97,
  beta.prod.consumer = 0.4,
  es.prod.lab.consumer = 1,
  gr = 0,
  wage.payment = "post",
  ...
)

Arguments

alpha.firm	a positive vector, indicating the efficiency parameters of the firm for each economic period. The number of economic periods will be set to length(alpha.firm) .
es.prod.lab.firm	the elasticity of substitution between product and labor in the production function of the firm.
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.
beta.prod.consumer	the share parameter of the product in the period utility function.
es.prod.lab.consumer	the elasticity of substitution between product and labor in the CES-type period utility function of the consumer.
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".
...	arguments to be passed to the function sdm2.

Value

A general equilibrium (see sdm2).

References

Torres, Jose L. (2016, ISBN: 9781622730452) Introduction to Dynamic Macroeconomic General Equilibrium Models (Second Edition). Vernon Press.

See Also

gemCanonicalDynamicMacroeconomic_Timeline_2_2,
gemCanonicalDynamicMacroeconomic_Sequential_3_2,
gemCanonicalDynamicMacroeconomic_Sequential_WagePostpayment_4_3.

Examples

#### Take the wage postpayment assumption.
ge <- gemCanonicalDynamicMacroeconomic_TimeCircle_2_2()
np <- 3
eis <- 1
rho.beta <- 0.97
gr <- 0
ge$p
growth_rate(ge$p[1:np])
1 / (1 + sserr(eis = eis, rho.beta = rho.beta, gr = gr)) - 1
ge$z
growth_rate(ge$z[1:np])
ge$D
ge$S

##  Take the wage postpayment assumption.
eis <- 0.8
rho.beta <- 0.97
gr <- 0.03
ge <- gemCanonicalDynamicMacroeconomic_TimeCircle_2_2(
  es.prod.lab.firm = 0.8,
  eis = eis, rho.beta = rho.beta, es.prod.lab.consumer = 0.8,
  gr = gr
)

ge$p
growth_rate(ge$p[1:np])
1 / (1 + sserr(eis = eis, rho.beta = rho.beta, gr = gr)) - 1
ge$z
growth_rate(ge$z[1:np])
ge$D
ge$S

#### an anticipated technology shock.
## Warning: Running the program below takes about 4 minutes.
# np <- 120
# alpha.firm <- rep(1, np)
# alpha.firm[40] <- 1.05
# ge <- gemCanonicalDynamicMacroeconomic_TimeCircle_2_2(alpha.firm = alpha.firm)

## The steady state product supply is 343.92.
## the (economic) time series of product supply
# plot(ge$z[1:np] / 343.92 - 1, type = "o", pch = 20)
## The steady state product consumption is 57.27.
## the (economic) time series of product consumption
# plot(ge$D[2:np, np + 1] / 57.27 - 1, type = "o", pch = 20)

#### Take the wage prepayment assumption.
ge <- gemCanonicalDynamicMacroeconomic_TimeCircle_2_2(wage.payment = "pre")
np <- 3
eis <- 1
rho.beta <- 0.97
gr <- 0
ge$p
growth_rate(ge$p[1:np])
1 / (1 + sserr(eis = eis, rho.beta = rho.beta, gr = gr)) - 1
ge$z
growth_rate(ge$z[1:np])
ge$D
ge$S

##  Take the wage prepayment assumption.
eis <- 0.8
rho.beta <- 0.97
gr <- 0.03

ge <- gemCanonicalDynamicMacroeconomic_TimeCircle_2_2(
  es.prod.lab.firm = 0.8,
  eis = eis, es.prod.lab.consumer = 0.8,
  rho.beta = rho.beta, gr = gr,
  wage.payment = "pre"
)

ge$p
growth_rate(ge$p[1:np])
1 / (1 + sserr(eis = eis, rho.beta = rho.beta, gr = gr)) - 1
ge$z
growth_rate(ge$z[1:np])
ge$D
ge$S

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