# Simple question

I must have a stupid mistake somewhere. This is the simple model without labor supply.
The policy function should give me y(t)= .36 * k(t-1) +Z(t)
where .36 is the labor share.
Instead it is giving me y(t) = .0526 k(t-1) + Z(t)
and interestingly, .0526 is the interest rate.

Suggestions would be greatly appreciated.

var Y K e_A C R ;
varexo eps_A ;
parameters beta delta alpha rho_A nu ;
beta=0.95;
delta=0.0;
alpha=0.36;
nu=2.0;
rho_A=0.85;

model;
Y=exp(e_A)K(-1)^alpha;
Y=C+ K-(1-delta)K(-1);
1=(C(+1)/C)^(-nu)beta(1+R(+1));
R=alpha
K(-1)^(alpha-1)-delta;
e_A=rho_A
e_A(-1)+eps_A;
end;

initval;
K=10;
C=2.09;
e_A=0;
end;

shocks;
var eps_A; stderr sqrt(.04);
end;

stoch_simul(order=1,nograph,nocorr,nomoments);

POLICY AND TRANSITION FUNCTIONS
Y K e_A C R
Constant 2.949299 20.173181 0 2.949299 0.052632
K (-1) 0.052632 0.971856 0 0.080776 -0.001670
e_A(-1) 2.506904 1.613092 0.850000 0.893812 0
eps_A 2.949299 1.897755 1.000000 1.051544 0

How do you know that the policy function should be:
Y(t) = 0.36*K(-1) + … ?

Best,

It is .36 because it is the share of capital. I figured this out. It is linear vs log linear. Thanks.

model;
Y=e_A+alphaK(-1);