

function P = parameters

% Parameters: Specifies model parameters
%   P = parameters creates a structure of model parameters

% Household
P.gamma=.87; 
P.alpha=.4230;  
P.mu=.946; 
P.phi=.6; 
P.psi=-.6;
P.beta=0.985;
P.iota=1.5;
P.eta=2; 
P.zeta=.1;

% Firm
P.chi_h=.95; 
P.chi_e=1-P.chi_h;  
P.theta=.33; 
P.theta_k=.3;
P.theta_h=.65;
P.theta_e=.05;
P.delta=0.1; 
P.nu=-10; 
P.xi=.77; 

% Shocks
P.ga=.017; 
P.ge=(2.26-1.23*(1+P.ga))-1; 
P.rho_k=0.99; 
P.rho_e=.97; %.83 
P.rho_s=.91; 
P.rho_p=.97; 
P.rho_taud=.9056; 
P.sig_k=.0082; %sd for capital-labor
P.sig_e=.00757; %sd variance for energy
P.sig_s=.00292; %sd for emissions 
P.sig_p=.0121; %sd for energy price (the exog component)
P.sig_taud=.0047; %.0105 variance for env taxes (standard error .1027)

%pollution
P.b0=.44; %.177;
P.b1=.04; %.07;

%Taxes
P.tau_c=.076; 
P.tau_x=.0276; 
P.tau_h=.32; 
P.tau_k=.293;
P.tau_marg=.32; 
P.tau_d=0.05; 

% Algorithm
P.tol     = 1e-10;    % Convergence criterion
P.lambda  = 0.50;     % Weight on updated coeffiecients 
