% DNLAG.M : dynamic neo-keynesian model with ad-hoc decision lags WITHOUT CAPITAL, set baseline parameters here
% The model is basically a replica of Rotemberg-Woodford 1997 NBER Macro Annual paper
% @Matteo Iacoviello 24 April 2004
%
% Calls DNLAG_GO 


clear;
close all;

r_a = 0.5 ; % TECHNOLOGY SHOCK PERSISTENCE
r_e = 0.0 ; % interest rate shock persistence

sd_a = 0.03 ;
sd_e = 0.01 ;
corr_a_e = 0; % CORRELATION B/W SHOCKS

d = .03 ; % DEPRECIATION RATE OF CAPITAL
b = .99; % beta

pb = 0.01 ; % BACKWARDLOOKINGNESS IN THE PHILLIPS CURVE

eta = 5 ; % PARAMETER DESCRIBING HOW ELASTIC LABOUR SUPPLY IS  [ LAB_ELASTICITY IS 1/(ETA-1) ]

te = .75 ; % probability of not changing prices
X = 1.1 ; % markup

ro = 1 ; % RISK AVERSION in consumption

e = 0.01 ; % degree of habit persistence

r_r = 0.8 ; r_p = 2 ; r_y =0.0 ; % Taylor rule



% A BUNCH OF OPTIONS THAT YOU DONT WANT TO CHANGE HERE
axistight=1; grids=0;





% HERE YOU HAVE THE CHANCE TO CALIBRATE A FEW PARAMETERS AND THEN COMPARE THE IMPULSE RESPONSES OF THE MODEL
% CHANGING SOME OF THEM EACH TIME

cha=0;
te = 0.75 ;
dnlag_go