MODEL>  NOMRIGIDITIES

ENDOG>  INF 
        INF_F1
        INF_F2
        Q                            
        QBAR                        
        W 
        W_F1
        W_F2
        WBAR 
        WBAR_F1
        WBAR_F2
        C  
        C_F1
        C_F2
        K 
        K_F1
        K_F2
        KBAR
        KBAR_F1
        L 
        L_F1
        L_F2
        PSI 
        PSI_F1
        PSI_F2
        PSIC
        PSIC_F1
        PSIC_F2
        BIGR 
        BIGR_F1
        BIGR_F2
        H     
        H_F1
        H_F2
        U                              
        P  
        P_F1
        P_F2
        I   
        I_F1
        I_F2
        SMALLR
        SHAT
        SHAT_F1
        M
        NU
        
EQUATION>   PRICE_INFLATION
EQ>         INF =  (1/(1+BETA))*LAG(INF,1) + (BETA/(1+BETA))*LAG(INF_F2,1)  +  ( (1-BETA*EP)*(1-EP)/((1+BETA)*EP) ) * LAG(SHAT_F1,1) 

EQUATION>   REAL_MARGINAL_COST
EQ>         SHAT = ALPHA*SMALLR + (1-ALPHA)*(WBAR - INF - BIGR)

EQUATION>   NOMINAL_CASH_BALANCES
EQ>         Q = (-1/SIGMAQ)*( (RPAR/(RPAR-1))*BIGR + PSI )

EQUATION>   MARGINAL_UTILITY_OF_INCOME
EQ>         PSI = LEAD(PSI,1) + LEAD(BIGR,1) - LEAD(INF,1)

EQUATION>   IDENTITY_1
EQ>         ((1-LAMBDAW)/(BETAW*EW))*LAG(L_F1,1) = LAG(W,1) - (( (BETAW*(1+BETA*EW^2) - LAMBDAW)/(BETAW*EW) )*LAG(W_F1,1)) + 
                ( BETA*LAG(W_F2,1) ) + (BETA*(LAG(INF_F2,1)-LAG(INF_F1,1))) - (LAG(INF_F1,1)-LAG(INF,1)) + 
                ((1-LAMBDAW)/(BETAW*EW)*LAG(PSI_F1,1))
                
EQUATION>   NOMINAL_WAGE_RATE
EQ>         W = WBAR + INF

EQUATION>   REAL_CASH_BALANCES
EQ>         QBAR = Q - INF

EQUATION>   CAPITAL_SERVICES
EQ>         K = KBAR*UPAR

EQUATION>   IDENTITY_2
EQ>         LAG(P_F1,1)+LAG(PSI_F1,1)-LAG(PSI_F2,1) = ( (1-BETA*(1-DELTA)) * (LAG(WBAR_F2,1) - LAG(INF_F2,1) + 
                    LAG(BIGR_F2,1) + LAG(L_F2,1) - LAG(K_F2,1)) ) + (BETA*(1-DELTA)*LAG(P_F2,1))
                 
EQUATION>   RENTAL_RATE
EQ>         SMALLR = W+BIGR+L-K

EQUATION>   IDENTITY_3
EQ>         ((1/BETA)+DELTA-1)*(SK/SC)*U + C + (DELTA*SK/SC)*I = (ALPHA/SC)*K + ((1-ALPHA)/SC)*H

EQUATION>   IDENTITY_4
EQ>         NUPAR*MPAR*(NU+M) = QPAR*(QBAR-INF) + WPAR*LPAR*(WBAR-INF+L) 

EQUATION>   IDENTITY_5
EQ>         M = LAG(NU,1) + LAG(M,1) - INF 

EQUATION>   IDENTITY_6
EQ>         H = CHI*LAG(H,1) + (1-CHI)*LAG(C,1) 

EQUATION>   IDENTITY_7
EQ>         BETA*CHI*LAG(PSIC_F2,1) = SIGMAC*(LAG(C_F1,1) - (B/(1-CHI))*LAG(H_F1,1)) - (B+CHI)*BETA*SIGMAC*(LAG(C_F2,1) - 
                (B/(1-CHI))*LAG(H_F2,1)) + LAG(PSIC_F1,1) 

EQUATION>   SHADOW_PRICE_OF_CAPITAL
EQ>         LAG(P_F1,1) = S*(LAG(I_F1,1)-LAG(I,1)-BETA*(LAG(I_F2,1)-LAG(I_F1,1)))

EQUATION>   CAPITAL_STOCK
EQ>         KBAR = (1-DELTA)*LAG(KBAR,1) + DELTA*LAG(I,1)

EQUATION>   IDENTITY_8
EQ>         LAG(K_F1,1) = LAG(KBAR_F1,1) + (1/SIGMAA)*(LAG(WBAR_F1,1)+LAG(INF_F1,1)+LAG(BIGR_F1,1)+LAG(L_F1,1)-
                LAG(K_F1,1)) 

EQUATION>   MARGINAL_UTILITY_OF_CONSUMPTION
EQ>         U = K - KBAR

EQUATION>   FORECAST_1
EQ>         INF_F1 = LEAD(INF,1)

EQUATION>   FORECAST_1
EQ>         W_F1 = LEAD(W,1)

EQUATION>   FORECAST_1
EQ>         WBAR_F1 = LEAD(WBAR,1)

EQUATION>   FORECAST_1
EQ>         C_F1 = LEAD(C,1)

EQUATION>   FORECAST_1
EQ>         K_F1 = LEAD(K,1)

EQUATION>   FORECAST_1
EQ>         KBAR_F1 = LEAD(KBAR,1)

EQUATION>   FORECAST_1
EQ>         L_F1 = LEAD(L,1)

EQUATION>   FORECAST_1
EQ>         PSI_F1 = LEAD(PSI,1)

EQUATION>   FORECAST_1
EQ>         PSIC_F1 = LEAD(PSIC,1)

EQUATION>   FORECAST_1
EQ>         BIGR_F1 = LEAD(BIGR,1)

EQUATION>   FORECAST_1
EQ>         H_F1 = LEAD(H,1)

EQUATION>   FORECAST_1
EQ>         P_F1 = LEAD(P,1)

EQUATION>   FORECAST_1
EQ>         I_F1 = LEAD(I,1)

EQUATION>   FORECAST_1
EQ>         SHAT_F1 = LEAD(SHAT,1)

EQUATION>   FORECAST_2
EQ>         INF_F2 = LEAD(INF,2)         

EQUATION>   FORECAST_2
EQ>         W_F2 = LEAD(W,2)

EQUATION>   FORECAST_2
EQ>         WBAR_F2 = LEAD(WBAR,2)         

EQUATION>   FORECAST_2
EQ>         C_F2 = LEAD(C,2)

EQUATION>   FORECAST_2
EQ>         K_F2 = LEAD(K,2)         

EQUATION>   FORECAST_2
EQ>         L_F2 = LEAD(L,2)

EQUATION>   FORECAST_2
EQ>         PSI_F2 = LEAD(PSI,2)         

EQUATION>   FORECAST_2
EQ>         PSIC_F2 = LEAD(PSIC,2)

EQUATION>   FORECAST_2
EQ>         BIGR_F2 = LEAD(BIGR,2)         

EQUATION>   FORECAST_2
EQ>         H_F2 = LEAD(H,2)

EQUATION>   FORECAST_2
EQ>         P_F2 = LEAD(P,2)         

EQUATION>   FORECAST_2
EQ>         I_F2 = LEAD(I,2)


END
