% RBCFULL: simulates RBC model and calculates asset pricing statistics: model based on Lettau, Economic Journal, 2003
% see RBCFULL_GO for details
% THis version: 28 April 2004
clear; close all
% Setting parameters:
N = 1.0/3; % Steady state employment is a third of total time endowment
Z = 1; % Normalization
a = 0.333 ; % Capital share
d = 0.025; % Depreciation rate for capital
R = 1.015; % One percent real interest per quarter
ro = 1 ; % constant of relative risk aversion = 1/(coeff. of intertemporal substitution)
psi = .95 ; % autocorrelation of technology shock
% for stdev of technology shock, see matrix Sigma
% adjustment cost for capital
fi = 0;
eta = 1000 ; % labor supply elasticity is 1/(eta-1)
HORIZON=41 ;
DO_HP_FILTER = 0;
grids = 1;
axistight = 1;
% TABLE 1, penultimate row
eta = 200000; % zero LS elasticity
ro = 1; % relative risk aversion
psi = 0.95; % persistence in productivity
rbcfull_go;