Hello everyone, my model introduces the consumption tax rate (tc), labor tax rate (tl) and capital tax rate (tk), and studies the impact of these tax rate changes on the impact of government expenditure. I want to know how to do this analysis:
How the government expenditure shock (g) affects other endogenous variables with a 1% increase in the consumption tax rate (tc). That is, how to study the impact of these two shocks on endogenous variables at the same time?
My model is below. Can you help me to see if it is reasonable?
clc;
close all;
var c l lambada y w r rk v x z k i b g t tc tl tk;
varexo ev ex ez eg etc etl etk;
parameters rhov rhox rhoz gamma beta alpha phi omiga delta rhog dphi rhotc rhotl rhotk;
parameters css lss lambadass yss rss rkss wss vss xss zss kss iss bss gss tss ss1 ss2 ss3 ss4 ss5 tcss tlss tkss;
gamma = 2;
phi = 1;
beta = 0.99;
delta = 0.025;
alpha = 0.6;
omiga = 1;
rhov = 0.9;
rhox = 0.9;
rhoz = 0.9;
rhog = 0.9;
dphi = 0.1;
rhotc = 0.9;
rhotl = 0.9;
rhotk = 0.9;
zss = 1;
vss = 1;
xss = 1;
ss4 = 0.2; //gss/yss
ss5 = 5; //bss/yss
tcss = 0.1;
tlss = 0.2;
tkss = 0.25;
rss = 1/beta-1;
rkss = (rss/(1-tkss))+delta;
wss = ((zss*(alpha^alpha)*((1-alpha)^(1-alpha)))/(rkss^alpha))^(1/(1-alpha));
ss1 = alpha/rkss;
ss2 = (1-alpha)/wss;
ss3 = 1-delta*ss1-ss4;
yss = ((1-tlss)/(1+tcss)*(1-alpha)*(ss2^(-1))*(ss3^(-gamma))/(omiga*xss*(ss2)^phi))^(1/(phi+gamma));
kss =ss1*yss;
lss =ss2*yss;
css =ss3*yss;
gss =ss4*yss;
bss =ss5*yss;
lambadass=vss*css^(-gamma)/(1+tcss);
iss =yss-css-gss;
tss =gss+rss*bss-tcss*css-tkss*(rkss-delta)*kss-tlss*wss*lss;
model;
(1+tc+tcss)*lambadass*(1+lambada)=vss*(1+v)*(css^(-gamma))*(1-gamma*c);
(1-tl-tlss)*wss*(1+w)*lambadass*(1+lambada)=omiga*vss*(1+v)*xss*(1+x)*(lss^phi)*(1+phi*l);
(1+lambada) = beta*(1+(1-tk-tkss)*(rk+rkss-delta))*(1+lambada(+1));
(r+rss) = (rk+rkss-delta)*(1-tk-tkss);
rk = alpha*((yss*(1+y))/(kss*(1+k)))-rkss;
wss*(1+w) = (1-alpha)*yss*(1+y)/(lss*(1+l));
kss*(1+k) = (1-delta)*kss*(1+k(-1))+iss*(1+i(-1));
yss*(1+y) = css*(1+c)+iss*(1+i)+gss*(1+g);
yss*(1+y) = zss*(1+z)*(kss^alpha)*(1+alpha*k)*(lss^(1-alpha))*(1+(1-alpha)*l);
bss*(1+b) = (1+rss+r(-1))*bss*(1+b(-1))+gss*(1+g(-1))-(tcss+tc(-1))*css*(1+c(-1))-((tkss+tk(-1))*(rkss+rk(-1)-delta)*kss*(1+k(-1)))-(tlss+tl(-1))*wss*(1+w(-1))*lss*(1+l(-1))-tss*(1+t(-1));
t = dphi*bss*b/tss;
v = rhov*(v(-1))+ev;
x = rhox*(x(-1))+ex;
z = rhoz*(z(-1))+ez;
g = rhog*(g(-1))+eg;
tc = rhotc*(tc(-1))+etc;
tl = rhotl*(tl(-1))+etl;
tk = rhotk*(tk(-1))+etk;
end;
initval;
etc = 0;
end;
endval;
etc = (1-rhotc)*log(1.01);
end;
shocks;
var etc;
periods 0;
values 0;
var eg;
periods 1;
values 0.01;
end;
simul(periods=40);
rplot y;
rplot c;
Cha3bn1_tc.mod (2.5 KB)