Thank you Professor, for always quick reply! I’ll carefully study your work!

In LWZ’s measurment equations .m file, I couldn’t understand the following lines. I took a quick scan of your work and didn’t find the answer.

[code]a1st(1) = log(glambdastar);

a1st(2) = log(glambdaq);

a1st(3) = log(glambdastar);

a1st(4) = log(glambdastar);

a1st(5) = log(glambdastar);

a1st(6) = log(nbar);

%-- A few derived parameters.

InvdenTerm = 1.0/(1.0-(1.0-gphi)*galpha);

numTerm = (1.0-gphi)*galpha;

COY = CeOY + ChOY;

CeOC = CeOY/COY; % Ce/C

ChOC = ChOY/COY; % Ch/C

%—$$##

%— 1st measurement equation for land price.

H1st(1,1) = 1.0;

H1st(1,34) = -1.0;

H1st(1,18) = InvdenTerm;

H1st(1,19) = InvdenTerm;

H1st(1,39) = -InvdenTerm;

H1st(1,20) = numTerm*InvdenTerm;*

H1st(1,21) = numTermInvdenTerm;

H1st(1,40) = -numTerm*InvdenTerm;*

%— 2nd measurement equation for biased technology.

H1st(2,20) = 1.0;

H1st(2,21) = 1.0;

H1st(2,40) = -1.0;

%— 3rd measurement equation for consumption.

H1st(3,2) = ChOC;

H1st(3,35) = -ChOC;

H1st(3,3) = CeOC;

H1st(3,36) = -CeOC;

H1st(3,18) = InvdenTerm;

H1st(3,19) = InvdenTerm;

H1st(3,39) = -InvdenTerm;

H1st(3,20) = numTermInvdenTerm;

H1st(3,21) = numTerm*InvdenTerm;*

H1st(3,40) = -numTermInvdenTerm;

%— 4th measurement equation for investment.

H1st(4,4) = 1.0;

H1st(4,37) = -1.0;

H1st(4,18) = InvdenTerm;

H1st(4,19) = InvdenTerm;

H1st(4,39) = -InvdenTerm;

H1st(4,20) = numTerm*InvdenTerm;*

H1st(4,21) = numTermInvdenTerm;

H1st(4,40) = -numTerm*InvdenTerm;*

%— 5th measurement equation for business debt.

H1st(5,12) = 1.0;

H1st(5,38) = -1.0;

H1st(5,18) = InvdenTerm;

H1st(5,19) = InvdenTerm;

H1st(5,39) = -InvdenTerm;

H1st(5,20) = numTermInvdenTerm;

H1st(5,21) = numTerm*InvdenTerm;*

H1st(5,40) = -numTermInvdenTerm;

%— 6th measurement equation for hours.

H1st(6,5) = 1.0;

%—$$##

F1st(nzbase+1,1) = 1.0; %34

F1st(nzbase+2,2) = 1.0; %35

F1st(nzbase+3,3) = 1.0; %36

F1st(nzbase+4,4) = 1.0; %37

F1st(nzbase+5,12) = 1.0; %38

F1st(nzbase+6,19) = 1.0; %39

F1st(nzbase+7,21) = 1.0; %40[/code]

There were 6 observable variables. And it seems that they were dealing with them for the first 40 periods. Would it possible that you explain for me?

Thanks!

Fuyang