% 1 represents home country, 2 represents foreign country
chi1 = 1;
chi2 = 1;
G1ss = 1;
G2ss = 1;
agg1 = 1;
agg2 = 1;

% new additions of parameters 

zeta1 = 0.6;
zeta2 = 0.4;
omega_h = 0.3;
psi_u = 0.2;
psi_c = 0.3;
Gamma1_c = 0.4;
Gamma2_c = 0.5 ;
mu_d = 0.3;
collat_c1 = 0.4;
collat_c2 = 0.6;
kappa_r1  = 0.5;
kappa_r2 = 0.6;
L_l = 0.2;
T1ss_u = 0.3;
T1ss_c = 0.4;


%CBDC parameters
Theta1=1;         %preference parameter. If =1cbdc are as cash, if 1.1 cbdc are 10% better than cash
Theta2=1;         %Baseline 1.1
chi_dc1=0.5;          %weight to CBDC/Cash preferences in Utility function
chi_dc2=0.5;          
Gamma1=0.4;         %median household preference for cash
Gamma2=0.6;
phidc2=0.001;       %foreign cbdc holding costs (only in country 2)    
                    %Baseline 0.001, 0.01
gamma_dc1=0.7;      %persistance of CBDC rate
theta_ydc1=0.26;     %sesitivity of cbdc rate to output
theta_pdc1=1.49;     %sensitivity of cbdc rate to inflation
storage1=1;         %storege cost for money (1=0, 0.9=10% cost)
storage2=1;
rho_dc=2;

%Monetary policy
gamma_pol1=0.75;%Interest rate smoothing 
gamma_pol2=1.50;
gamma_pol3=0.75;
theta_pol11=1.2; %sensitity to inflation
theta_pol12=1.1;
theta_pol13=1.5;
theta_pol21=0.6;%sensitity to output
theta_pol22=0.6;
theta_pol23=0.6*0;

%Behavioural equations
beta1=0.9926;   %discount factor
beta2=0.9926;
sigma1=1;       %elasticity of consumption  
sigma2=1;
h1=0.65;        %habit persistence  
h2=0.65;
% chi1=;        %weight of labor (computed in steady state)  
% chi2=;
phi1=1.2;         %inverse of Frish labor elasticity
phi2=1.05;     
mi1=0.4;          %weight of cash in the utility function
mi2=0.6;
sigmam1=9.62;  %elasticity of cash demand
sigmam2=10.62;
phib1=0.001;    %foreign bond holding cost     
phib2=0.01;
phik1=1.728;    %investment cost
phik2=1.928;
deltak1=0.06;  %depreciation rate of capital
deltak2=0.05;
rho1=1/3;%elastity of substitution between home and foreign
rho2=1/3;
omega11=0.9;     %home bias (assume 90% domestic)
omega22=0.9;
omega12=1-omega11;
omega21=1-omega22;
csi1=0.6;       %calvo parameter
csi2=0.6;
ni1=6;          %elasticity of substitutions (goods)
ni2=6;
tau1=0;         %mark-up tax
tau2=0;
alpha1=0.3;     %technology
alpha2=0.2;
Lss1=1;         %steady state labor supply (normalized to one)
Lss2=1;
GY1ss=0.18;      %Gov. spending / Output in steady state
GY2ss=0.21;

%Shock processes
rhoRR1=0.36;
rhoRR2=0.06;
sigma_r1=0.16;
sigma_r2=0.24;
rhoA1=0.96;
rhoA2=0.95;
sigma_a1=0.78;
sigma_a2=0.44;
rhoG1=0.86;
rhoG2=0.95;
sigma_g1=0.36;
sigma_g2=0.53;
rhoEC1=0.81;
rhoEC2=0.8;
sigma_ec1=0.49;
sigma_ec2=0.73;
rhoPSI1=0.92;
rhoPSI2=0.97;
sigma_psi1=0.53;
sigma_psi2=0.55;
rhoP1=0.95;     %price shock
rhoP2=0.84;
sigma_price1=0.14;
sigma_price2=0.15;


if 1
%Monetary policy
gamma_pol1=0.92;%Interest rate smoothing 
gamma_pol2=0.87;
theta_pol11=1.49; %sensitity to inflation
theta_pol12=1.68;
theta_pol21=0.26;%sensitity to output
theta_pol22=0.04;
csi1=0.76;       %calvo parameter
csi2=0.33;
h1=0.75;        %habit persistence  
h2=0.75;
phik1=3.88;    %investment cost
phik2=5.24;
alpha1=0.25;     %technology
alpha2=0.25;
end