Dynare留学生代做、代写Matlab Project、代做Matlab编程语言、代写honor code

日期：2019-07-31 10:10

Dynare/Matlab Project

International Finance (Open Economy Macroeconomics)

NOTE: “Handing in solutions to this project” involves scanning and emailing your analytical

solutions (to be written in directly in this handout), emailing me the Dynare code(.mod file),

1 The project is due on Thursday, August 8, 2019 at 6 pm (of course,

you are welcome to send me your solutions earlier). This project has a total of 100 points.

Late projects will not be accepted (except in the case of a reasonable excuse, such as, for

instance, justified medical issues).

Please make sure to print your name and sign the ”honor code” statement below. Any

projects returned without a name and signature will earn a grade of zero.

My name is:

I sign my name as a witness that I have not engaged in any form of academic misconduct

and abided by Johns Hopkins University’s honor code in solving this project. I also confirm

that each group member made honest and equal contributions to the project.

Group member 1:

Group member 2:

Group member 3:

Signature1: Date:

Signature2: Date:

Signature3: Date:

1ALTERNATIVELY, YOU CAN TYPE YOUR SOLUTIONS AND ATTACH YOUR ANSWERS TO

THIS PDF.

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Consider two large open economies, home and foreign (foreign variables that need not

be equal to home variables are denoted by an asterisk. Each economy is inhabited by a

continuum of identical individuals grouped into an aggregate risk sharing household. In

each country there is also a representative final goods producing firm. International trade

occurs in this final good. Lifetime utility is given by:

where: Et

is the expectation operator, β ∈ (0, 1) is the (constant) subjective discount factor,

C and C denote consumption, γ > 0 and γ > 0 are parameters, η > 0 is the Frisch

(marginal value of real wealth held constant) elasticity of labor supply, and N and N denote labor.

Production in each country is determined by:

where: A and A are stochastic technology processes; α ∈ (0, 1); K and K? denote capital;

and Z and Z are scaling parameters. Furthermore:

where: ρ, ρ > 0; v, v > 0; Et (εt) = Et (εt) = 0; and the standard deviations of ε and εare, respectively, σε and σε . In the preceding, all variables are normalized by the world

population, which consists of a unit mass. Also, the evolution of capital in each country is

given by:

Kt+1 = It + (1δ) Kt

where I and I

denote investment and δ and δ

are capital depreciation rates. Finally,

changing capital holdings involves a real adjustment cost of the form

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for the foreign country, where κ and κ

are positive parameters; this adjustment cost means

that the faster adjustments in the capital stock are the more expensive they are. Furthermore,

these costs are symmetric, so that reducing capital is as expensive as expanding it. The way

adjustment costs are written here, replacing depreciated capital does not generate adjustment

costs.

A benevolent world social planner solves the following problem:

max

. In addition, ψ is the fraction of the world population that

lives in the home country. So, the benevolent world social planner is weighting the utility of

each country by their relative size in the world economy. Finally, G and G? are exogenous

government consumption.

1) Set up the benevolent world social planner’s current value Lagrangian using one constraint,

only, and using λt to denote the time t Lagrange multiplier. Please write your answer

below. (10 points total)

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2) State the corresponding first-order conditions for consumption, labor, and capital. Please

write your answer below. (15 points total)

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3) Using your answer to (2) write down the system of 18 equations in the 18 unknowns, C,C

that jointly solve the

model (note: in all cases you should substitute out the Lagrange multiplier and combine the

first order conditions as needed). Please write down your answer below. (15 points

total)

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4) Assume the following parameter values: ψ = 0.5; η = 4; α = 2/3; β = 0.988; δ =δ = 0.025; γ = 10.7863; γ = 10.5256; G = 0.1017; G? = 0.0760; Z = 1; Z = 0.9283.

Of note, γ such that in steady state N = 1700/8760 (1700 is average hours worked in the

United States per year and 8760 is total hours available per year); γ

is such that in steady

state N = 1200/8760 (1200 is average hours worked in the euro area per year); G is such

that in steady state G/Y = 0.175, which is the average ratio of government consumption

to output in the United States; G?

is such that G?/Y = 0.207, which is the average ratio

of government consumption to output in the euro area; and Z

is such that in steady state

C/Y  = 0.76, which is the average ratio of private consumption to output in the euro area.

Also, assume that ρ = ρ = 0.906; v = v = 0.088; σε = σε = 0.00852; κ = κ = 0; and that

the contemporaneous correlation of the structural shocks is given by:

corr (εt, εt) = 0.258.

These parameter values are roughly consistent with the following steady state values:2

Variable Rough Steady State Value

2Please fill in the missing ones.

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Given these steady state values, what is the intuition behind: C and C

being equal K

and K being different I and I

being different Y and Y

being different NX and NX

being different BE VERY EXPLICIT ABOUT THE INTUITIONS!

You can write down your answers below, but I prefer you typinge your answers

and attaching it. (15 points total)

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5) Given all of the information you have been provided with and/or arrived at, generate

simulated data for all model variables for 500 periods and impulse response functions for 50

periods using Dynare’s stoch simul command. Print impulse response functions for the U.S.

(home country) in percent deviations from steady state, given a NEGATIVE 1 standard

deviation orthogonalized shock to the euro area’s (the foreign country’s) productivity. In

other words, you are giving a negative productivity shock to the foreign economy and analyzing

the effects on home country variables.

Send your impulse response figures in a Word file called ”IRF Figure” along

with your relevant Dynare code to generate those. (25 points total).

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6) Analyzing dynare’s output (IRFs, moments, correlations and autocorrelations), discuss

which of the 10 business cycle facts are consistent with your model. Which fact(s) does your

model fail to deliver? Especially, what does your model say regarding the CA? (We cannot

study some of the facts with this model, so skip them). Again, I encourage you to type your

answers and attach it to the pdf, rather than writing by hand. (10 points total).

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7) Read the material posted under the folder ”Term Project”. What are the 3 main puzzles

coming from business-cycle models? How researchers resolve these puzzles? Once again,

you are encouraged to type your answers and attach it to the pdf, rather than writing by

hand.(10 points total).

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