jojokre:
petiteelf writesC_ss Phi_l*(eta/2)*L_ss^(eta-1) oo_.var(2,2);C_ss Phi_l (eta/2)*L_ss^(eta-1) is the steady state of welfare. But which variance is oo_.var(2,2)? And which kind of welfare would be calculated here? Unconditional?
@jojokre I found one post that contains this welfare expression, though I don’t know the exact derivation. Full.mod (5.5 KB) (last few lines). Or you can give me some hints
Dear all,
I am confused on the calculation method in the paper of “Capital controls and optimal Chinese monetary policy“， which is published on JME 2015.
Here I attach the DYNARE CODE and the paper downloaded from the author’s website.
And the key part of the code is below:
planner_objective(C + log(C_ss) - (Phi_l*L_ss^(1+eta)/(1+eta))*exp((1+eta)*L));
ramsey_policy(planner_discount=1, nograph, noprint, irf=20, periods=1000, instruments=(R));
welf = -(1/(1-beta))*C_ss*Phi_l*(eta/2)*L_ss^(eta…
