var C N K Y I W R Q P A G rho NG;
varexo e_1 e_2 e_3;
parameters beta delta eta alpha zeta gamma rho_1 rho_2 rho_3 tau;

beta=0.99;
delta=0.1;
eta=0.77;
alpha=0.5;
zeta=0.35;
gamma=0.15;
rho_1=0.969;
rho_2=0.473;
rho_3=0.913;
tau=0.2353;

model;

//(1)labor supply
eta*C/(1-N)=W;

//(2)euler equation
1=beta*(C/C(+1))*((1-tau)*alpha*R(+1)+(1-delta));

//(3)energy
P=(1-tau)*gamma*Y/Q;

//(4)labor demand
W=(1-tau)*zeta*Y/N;

//(5)capital demand
R=(1-tau)*alpha*Y/K(-1);

//(6)account accumulation
Y=C+I+G+P*Q;

//(7)capital accumulation
K=(1-delta)*K(-1)+I;

//(8)pruduction function
Y=A*K(-1)^(alpha)*N^(zeta)*Q^(gamma);

//(9)goverment balance
tau*Y=G;

//(10)emission reduction expenditure
rho*G=NG;

//(11)technology shock
ln(A)=rho_1*ln(A(-1))+e_1;

//(12)price shock
ln(P)=rho_1*ln(P(-1))+e_2;

//(13)emission reduction expenditure shock
ln(rho)=rho_1*ln(rho(-1))+e_3;

end;


initval;
A=1;
P=1;
NG=1;
C=84;
N=0.67;
K=570;
I=57;
R=0.11;
Y=212;
W=84;
Q=33;
rho=0.02;
e_1=0;
e_2=0;
e_3=0;

end;
steady;
check;

shocks;

var e_1;stderr 0.01;
var e_2;stderr 0.01;
var e_3;stderr 0.01;

end;

stoch_simul(order=1);