%% Code performed by Marola Castillo Quinto
%% PARAMETERS IN THE MODEL
%%
%% Initial parameters
%%
b = 0.99;         
phi_ = 1;
alph = .25;       
the_h = 0.75;       
the_n = 0.55;
lamb_ = 1.0;
gamm_=.7;
phi_pi = 1.5;   
phi_y  = 0.0;
epsi = 6;
vi= 1/epsi;
kap = 1;
psi=1;
vareta=0.1;
i_=1/((vareta^vareta)*((1-vareta)^(1-vareta)));
%% Case of Balanced trade (previous code -- no longer used; nested below for kappa=1 & tbss=0):
%%w = 1-alph;
%%phi_1 = 1-w;
%%a_=((1-alph)/w);
%%var_sig=(a_^-phi_); 
%%
% Non-Balanced Trade: set tbss equal to long-run X-M/GDP
tbss=0.00;
w = (1-tbss)*(1-alph);
phi_1=(1-alph)*((1/w)-1)*kap;

% -World - External variables
Qn_x = 1;
c_x = 1;
C_Tx = gamm_*c_x;
pT_p_as = 1;

%Parameters (last two lines is for moments table)
sig_values = [2];
eta_values = [0.25 0.5 0.75];
%sig_values = [2.0];
%eta_values = [0.5];

% Shock ar coefficient [note that we now set z shock persistence to 0.75]
rhoz = 0.85;
rhoah = 0.7133245;
rhoan = 0.6;
rhov = 0.6; 

%Shock standard deviations
%Table 6
sigz  = 0.05;
siga_h  = 0.012;
siga_n  = 0.008;
sigv  = 0.0062;

%GDP per capita turned out to not be significant. The Balassa-Samuelson effect posits
%that the real exchange rate should appreciate when productivity of tradables rises
%more than productivity of nontradables relative to trading partners.

