Syntax Error help

Stochastic simulations
1

I am trying to simulate neoclassical growth model with leisure:

var c k lab z;

predetermined_variables k;

varexo eps;

parameters beta theta delta alpha tau rho s sigma ;

beta=0.987;

theta=0.357;

delta=0.012;

alpha=0.4;

tau=2;

rho=0.95;

s=0.007;

sigma=0.2;

model;

z = rho * z(-1) + s * eps;

(c^theta * (1 - lab)^(1-theta))^(1-tau)/c = beta * ((c(+1)^theta * (1-lab(+1))^(1-theta))^(1-tau)/c(+1)) * (1+ alpha * exp^z * k^(alpha-1) * lab^(1-alpha) - delta);

c = theta/1-theta * (1-lab) * (1-alpha) * exp^z * k^alpha * lab^(-alpha);

k(+1) = exp^z * k^alpha * lab^(1-alpha) - c + (1-delta) * k;

end;

initval;

k=1;

c=1;

lab=0.3;

z=0;

eps=0;

end;

check;

resid;

steady;

shocks;

var e = sigma^2;

stderr 1;

end;

stoch_simul(order=2, irf=40);

I get this error: ERROR: NGM.mod: line 18, col 123: syntax error, unexpected POWER, expecting ‘(’

I can’t see where the mistake is.

2

Hi syk2560,

You need to write exp(z) to take the exponential function of z, not exp^z. You need to correct that in all of the equations in which that syntax mistake occurs.

Moreover, you need to provide sensible initial values to compute the steady state of the economy.