periods 100; var c, k, z ; varexo v ; parameters gam, delt, alp, bet, rho, zs, ks, cs; alp = 0.35; delt =0.025; gam = 2; bet = 0.988; rho = 0.9; % Compute the steady state manually zs = 1 ; %steady-state value of technology shock ks = ((1/bet+delt-1)/alp)^(1/(alp-1)); %steady-state value of capital cs = zs*ks^(alp)-delt*ks; %steady-state value of consumption model; z - rho*z(-1)- v; exp(c)+exp(k)- (1-delt)*exp(k(-1)) - exp(z)*exp(k(-1))^alp; exp(c)^(-gam) - bet*exp(c(+1))^(-gam)*(exp(z(+1))*alp*exp(k)^(alp-1)+1-delt); end; initval; z = log(zs); k= log(ks); c= log(cs); end; steady; shocks; var v = 0.01^2; end; stoch_simul(dr_algo=0,periods=10000, irf=40, nocorr, nofunctions, order=1) ;