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Model declaration

model

model; [(LINEAR)] EQUATION_LIST end; Commands

The equations of the model are written in a block delimited by model; and end;.

There must be as many equations as there are endogenous variables in the model. The lead and lag of the variables are written in parenthesis immediately after the variable name. Leads or lags of more than one period are allowed. All the functions available in GAUSS, MATLAB or SCILAB, respectively, are recognized. Each equation must be terminated by a semicolon (;).

When the equations are written in homogenous form, it is possible to omit the "= 0" part and write only the left hand side of the equation.

The option LINEAR declares the model as being linear. It avoids to have to declare initial values for computing the steady state and it sets automatically ORDER=1 in STOCH_SIMUL.

Example 1 

model;
c =  - k + aa*x*k(-1)^alph + (1-delt)*k(-1);
c^(-gam) = (aa*alph*x(+1)*k^(alph-1) + 1 - delt)*c(+1)^(-gam)/(1+bet);
end;

Example 2 

model;
c + k - aa*x*k(-1)^alph - (1-delt)*k(-1);
c^(-gam) - (aa*alph*x(+1)*k^(alph-1) + 1 - delt)*c(+1)^(-gam)/(1+bet);
end;

Example 3 

model(linear);
x = a*x(-1)+b*y(+1)+e_x;
y = d*y(-1)+e_y;
end;