var c cT cN nT nN lambda p wT wN kT kN gT gN rN rT rS r aT aN yT yN iT iN tb bS y s v mu;
varexo e_gT e_gN e_aT e_aN e_s e_v e_mu;
parameters zeta sigma the_T omega gamma the_N phi_T beta gT_bar phi_N gN_bar rS_s alp_T alp_N delta psi rho_aT rho_aN rho_gT rho_gN rho_s rho_v rho_mu
kTs_nTs kNs_nNs wNs_ps cs_cTs cNs_cTs tbs_ys ss_ys s_yNs bS_s;
zeta=0.59;
sigma=-0.5;
the_T=0.5;
omega=1.99;
gamma=2;
the_N=0.5;
phi_T=9.65;
gT_bar=0.0183;
phi_N=4;
gN_bar=0.012;
rS_s=0.01;
alp_T=0.315;
alp_N=0.245;
delta=0.0065;
psi=0.000005;
rho_aT=0.97;
rho_aN=0.75;
rho_gT=0.15;
rho_gN=0.25;
rho_s=0.86;
rho_v=0.93;
rho_mu=0.04;
ss_ys=0.184;
tbs_ys=-0.015;
cs_cTs=0.59;
beta=1/((1+rS_s)*gT_bar^(-gamma));
rs=gN_bar/(beta*gT_bar^(1-gamma))-1;
rTs=1/(beta*gT_bar^(-gamma))-(1-delta);
rNs=gN_bar/(beta*gT_bar^(1-gamma))-(1-delta);
kTs_nTs=(rTs/alp_T)^(1/(alp_T-1))*gT_bar;
kNs_nNs=(rNs/alp_N)^(1/(alp_N-1))*gN_bar;
wTs=(1-alp_T)*gT_bar^(1-alp_T)*kTs_nTs^alp_T;
wNs_ps=(1-alp_N)*gN_bar^(1-alp_N)*kNs_nNs^alp_N;
nTs=((wTs/the_T)*(1/(zeta*cs_cTs))^(sigma-1))^(1/(omega-1));
cNs_cTs=((cs_cTs-zeta^(1-sigma))/(1-zeta)^(1-sigma))^(1/sigma);
ps=(zeta/(1-zeta)*cs_cTs)^(sigma-1);
wNs=wNs_ps*ps;
kTs=kTs_nTs*nTs;
yTs=kTs^alp_T*(nTs*gT_bar)^(1-alp_T);
nNs=((wNs/wTs)*(the_N/the_T))^(1/(omega))*nTs;
kNs=kNs_nNs*nNs;
yNs=kNs^alp_N*(nNs*gN_bar)^(1-alp_N);
ys=yTs+ps*yNs;
cNs=yNs*(1-(gN_bar-(1-delta))*(alp_N/rNs))-ss_ys*ys;
cTs=(ps*cNs*(1/cs_cTs))/(1-1/cs_cTs);
cs=cTs+ps*cNs;
iTs=kTs*(gT_bar-(1-delta));
iNs=kNs*(gN_bar-(1-delta));
tbs=tbs_ys*ys;
bS_s=tbs/(1-gT_bar/(1+rS_s));
lambda_bar=(cs-((the_T/omega)*nTs^omega+(the_N/omega)*nNs^omega))^(-gamma)*(cTs/(zeta*cs))^(sigma-1);
s_yNs=ss_ys/(ps*yNs);

model;
c=(zeta^(1-sigma)*cT^sigma+(1-zeta)^(1-sigma)*(cN)^sigma)^(1/sigma);
(c-((the_T/omega)*nT^omega+(the_N/omega)*nN^omega))^(-gamma)*(cT/(zeta*c))^(sigma-1)=lambda;
(c-((the_T/omega)*nT^omega+(the_N/omega)*nN^omega))^(-gamma)*(cN/(1-zeta)*c)^(sigma-1)=p*lambda;
(c-((the_T/omega)*nT^omega+(the_N/omega)*nN^omega))^(-gamma)*the_T*nT^(omega-1)=lambda*wT;
(c-((the_T/omega)*nT^omega+(the_N/omega)*nN^omega))^(-gamma)*the_N*nN^(omega-1)=lambda*wN;
lambda*v*(1+phi_T*(kT*gT/kT(-1)-gT_bar))=beta*gT^(-gamma)*(lambda(+1)*v(+1)*(rT(+1)+(1-delta)+phi_T*(kT(+1)*gT(+1)/kT-gT_bar)*(kT(+1)/kT)-phi_T/2*(kT(+1)*gT(+1)/kT-gT_bar)^2));
lambda*v*(1+phi_N*(kN*gN/kN(-1)-gN_bar))=beta*(gT^(1-gamma)/gN)*(lambda(+1)*v(+1)*p(+1)*(rN+(1-delta)+phi_N*(kN(+1)*gN(+1)/kN-gN_bar)*(kN(+1)/kN)-phi_N/2*(kN(+1)*gN(+1)/kN-gN_bar)^2));
lambda*v=beta*(1+rS)*gT^(-gamma)*lambda(+1)*v(+1);
lambda*v*p=beta*(1+r)*gT^(1-gamma)/gN*p(+1)*lambda(+1)*v(+1);
rS=rS_s+psi*(exp(bS(+1)-(bS_s))-1)+(exp(mu-1)-1);
rT=alp_T*aT*kT(-1)^(alp_T-1)*(nT*gT)^(1-alp_T);
wT=(1-alp_T)*aT*kT(-1)^alp_T*nT^(-alp_T)*gT^(1-alp_T);
rN=alp_N*aN*kN(-1)^(alp_N-1)*(nN*gN)^(1-alp_N);
wN=p*(1-alp_N)*aN*kN(-1)^alp_N*nN^(-alp_N)*gN^(1-alp_N);
yT=cT+iT+phi_T/2*(kT*gT/kT(-1)-gT_bar)^2*(kT(-1))+tb;
yN*(1-s_yNs*s)=cN+iN+phi_N/2*(kN*gT/kN(-1)-gN_bar)^2*kN(-1);
iT=kT*gT-(1-delta)*kT(-1);
iN=kN*gN-(1-delta)*kN(-1);
yT=aT*kT(-1)^alp_T*gT^(1-alp_T)*nT^(1-alp_T);
yN=aN*kN(-1)^alp_N*gN^(1-alp_N)*nN^(1-alp_N);
tb=bS-bS(+1)*gT/(1+rS);
y=yT+p*yN;
ln(aT)=rho_aT*ln(aT(-1))+e_aT;
ln(aN)=rho_aN*ln(aN(-1))+e_aN;
ln(gT/gT_bar)=rho_gT*ln(gT(-1)/gT_bar)+e_gT;
ln(gN/gN_bar)=rho_gN*ln(gN(-1)/gN_bar)+e_gN;
ln(v)=rho_v*ln(v(-1))+e_v;
ln(s)=rho_s*ln(s(-1))+e_s;
ln(mu)=rho_mu*ln(mu(-1))+e_mu;

end;

initval;
c=cs;
cT=cTs;
cN=cNs;
nT=nTs;
nN=nNs;
wT=wTs;
wN=wNs;
kT=kTs;
kN=kNs;
y=ys;
yT=yTs;
yN=yNs;
iT=iTs;
iN=iNs;
r=rs;
rT=rTs;
rN=rNs;
rS=rS_s;
p=ps;
tb=tbs;
bS=bS_s;
gT=gT_bar;
gN=gN_bar;
aT=0;
aN=0;
s=0;
v=0;
mu=0;
lambda=log(lambda_bar);
end;

shocks;
var e_gT=0.014;
var e_gN=0.014;
var e_aT=0.013;
var e_aN=0.013;
var e_s=0.036;
var e_v=0.036;
var e_mu=0.01;
end;
stoch_simul;