Example 4: Real Business Cycle Model with Time-to-Build Investment Technology
The files contained in the subdirectory \solve\ex4\ analyze the time-to-build RBC model described in the paper. It is a simplified version, without hours worked and with only two periods to build, with respect to the original Kydland and Prescott (1982).
|foc||Contains the first order condition (Euler equation).|
|focc||Uses the goods market clearing condition to determine consumption.|
|main||Computes the steady states, linearizes the first order condition about the steady state, solves the model computing the feedback and the feedforward matrices, computes moments and plots impulse response functions..|
|steady||Solves for the steady state of the model, given parameters.|
Kydland, Finn E. and C. E. Prescott, 1982, Time to Build and Aggregate Fluctuations, Econometrica; 50(6), November , pages 1345-70. (If you are affiliated to an organization participating to JSTOR, you can click here for a link to a .pdf file.)