Baseline calibration of area parameters

$$ \newcommand{\ss}{\mathrm{ss}} \newcommand{\gg}{\mathrm{gg}} \newcommand{\tratio}[2]{\left[{#1}\,\middle/{#2}\right]} \newcommand{\roc}[1]{\overset{\scriptsize\Delta}{#1{}}} $$

Demography: Steady-state parameters

Name	Math	Value	Description
`ss_nr`	$\mathit{nr}_\ss$	1	S/S Population, Relative to global population component
`ss_nw_to_nn`	$\tratio{\mathit{nw}}{\mathit{nn}}_\ss$	0.65	S/S Share of working age population in total population
`ss_nf_to_nw`	$\tratio{\mathit{nf}}{\mathit{nw}}_\ss$	0.7	S/S Labor participation rate

Demography: Dynamic parameters

Name	Math	Value	Description
`rho_nr`	$\rho_\mathit{nr}$	0.9	A/R Total population relative to global population component
`rho_nw`	$\rho_\mathit{nw}$	0.9	A/R Share of working age population in total population
`rho_nf`	$\rho_\mathit{nf}$	0.5	A/R Labor participation rate

Households: Steady-state parameters

Name	Math	Value	Description
`ss_zk`	$\mathit{zk}_\mathrm{ss}$	0.9	S/S Uncertainty discount factor on capital
`ss_zy`	$\mathit{zy}_\mathrm{ss}$	1	S/S Uncertainty discount factor on production cash flows
`beta`	$\beta$	0.95	Household discount factor
`delta`	$\delta$	0.15	Depreciation of production capital
`eta`	$\eta$	0.5	Inverse elasticity of labor supply
`eta0`	$\eta_0$	2.24516	Utility location parameter of labor supply
`nu_0`	$\nu_0$	0.481924	Intercept in current wealth utility
`nu_1`	$\nu_1$	0.07	Slope of current wealth utility
`upsilon_0`	$\upsilon_0$	0.308207	Level parameter in cost of utilization of production capital
`upsilon_1`	$\upsilon_1$	5	Inverse elasticity of cost of utilization of production capital

Households: Dynamic parameters

Name	Math	Value	Description
`rho_w`	$\rho_w$	0.5	A/R in real wage rate
`rho_zk`	$\rho_\mathit{zk}$	0.9	A/R in uncertainty discount factor on capital
`rho_zy`	$\rho_\mathit{zy}$	0.9	A/R in uncertainty discount factor on production cash flows
`chi`	$\chi$	1	Point of reference in consuptions switch
`chi_ch`	$\chi_\mathit{ch}$	0.3	Past consumption in reference consumption parameter
`chi_curr`	$\chi_\mathit{curr}$	0.6	Current income in reference consumption parameter
`xi_ih1`	$\xi_\mathit{ih,1}$	0	Type 1 investment adjustment cost parameter
`xi_ih2`	$\xi_\mathit{ih,2}$	0.8	Type 2 investment adjustment cost parameter
`theta_3`	$\theta_3$	0	Pressure relief valve for interest rate lower bound

Local supply side: Steady-state parameters

Name	Math	Value	Description
`ss_ar`	$\mathit{ar}_\ss$	1	S/S Area specific productivity component
`gamma_n0`	$\gamma_\mathit{n0}$	0.333333	Share of overhead labor
`gamma_m`	$\gamma_m$	0.15	Share of intermediate imports in stage T-3 production
`gamma_uk`	$\gamma_\mathit{uk}$	0.3	Share of capital services in stage T-2 production
`gamma_q`	$\gamma_q$	0.05	Share of commodity inputs in stage T-1 production
`gamma_yz`	$\gamma_\mathit{yz}$	0.6	Share of roundabout intermediates in stage T-0 production
`mu_py`	$\mu_\mathit{py}$	1.1	Monopoly power (markup) of local producers
`mu_y3`	$\mu_{y3}$	1.3	Markup to cover overhead labor

Local supply side: Dynamic parameters

Name	Math	Value	Description
`rho_ar`	$\rho_\mathit{ar}$	0.5	Autoregression in area specific productivity component
`zeta_py`	$\zeta_\mathit{py}$	0.5	Weight on S/S inflation in inflation indexation
`xi_y2`	$\xi_{y2}$	0.5	Stage T-2 input factor adjustment cost parameter
`xi_y1`	$\xi_{y1}$	2	Stage T-1 input factor adjustment cost parameter
`xi_py`	$\xi_\mathit{py}$	25	Price adjustment cost parameters

Monetary policy: Steady-state parameters

Name	Math	Value	Description
`ss_roc_pc`	$\roc{\mathit{pc}}_\ss$	1.03	S/S Price of private consumption, Rate of change
`floor`	$\mathit{floor}$	1	Switch for lower bound on short-term rate

Monetary policy: Dynamic parameters

Name	Math	Value	Description
`rho_r`	$\rho_r$	0.5	A/R in policy rate
`psi_pc`	$\psi_\mathit{pc}$	2.5	Monetary policy reaction to CPI
`psi_e`	$\psi_e$	0	Monetary policy reaction to nominal exchange rate
`psi_nh`	$\psi_\mathit{nh}$	0	Monetary policy reaction to real economic activity

Fiscal policy: Steady-state parameters

Name	Math	Value	Description
`ss_dg_to_ngdp`	$\tratio{\mathit{dg}}{\mathit{ngdp}}_\ss$	0.4	S/S Government debt to GDP ratio
`ss_ncg_to_ngdp`	$\tratio{\mathit{ncg}}{\mathit{ngdp}}_\ss$	0.2	S/S Government consumption to GDP ratio
`ss_trm`	$\mathit{trm}_\ss$	0	S/S General import tariff rate

Fiscal policy: Dynamic parameters

Name	Math	Value	Description
`tau_cg`	$\tau_\mathit{cg}$	0	Response in government consumption to government debt
`tau_txls1`	$\tau_{\mathit{txls},1}$	2.5	Response in type 1 lump-sum tax rate to government debt
`rho_cg`	$\rho_\mathit{cg}$	0.5	Autoregression in government consumption
`rho_txls1`	$\rho_{\mathit{txls},1}$	0.5	Autoregression in type 1 lump-sum tax rate
`rho_txls2`	$\rho_{\mathit{txls},2}$	0.5	Autoregression in type 2 lump-sum tax rate
`rho_trm`	$\rho_\mathit{trm}$	0	Autoregression in generate import tariff rate

Open economy: Steady-state parameters

Name	Math	Value	Description
`alpha`	$\alpha$	0.4	Import intensity of non-commodity exports
`gamma_xx`	$\gamma_\mathit{xx}$	0.5	Acceleration in exportable productivity
`theta_1`	$\theta_1$	0.1	Elasticity of household risk function wrt NFA
`theta_2`	$\theta_2$	1	Curvature of household risk function wrt NFA
`lambda`	$\lambda$	0.5	Share of local commodity production in world commodity production
`ss_zh_aut`	$\mathit{zh}^\mathrm{aut}_\ss$	0	S/S Autonomous component in country credit risk

Open economy: Dynamic parameters

Name	Math	Value	Description
`rho_zh_aut`	$\rho_{\mathit{zh}}^\mathrm{aut}$	0.7	A/R Autonomous component in country credit risk
`zeta_e`	$\zeta_e$	0.6	Weight on model-consistent expectations in exchange rate
`xi_y3`	$\xi_{y3}$	0.85	Adjustment cost parameter in stage t-3 production

Trade linkages: Steady-state parameters

Name	Math	Value	Description
`ss_trm_bb`	$\mathit{trm}_{\mathrm{bb},\ss}$	0	S/S Area specific import tariff rate

Trade linkages: Dynamic parameters

Name	Math	Value	Description
`rho_trm_bb`	$\rho_{trm,\mathrm{bb}}$	0	A/E Area specific import tariff rate

Finance linkages: Steady-state parameters

Name	Math	Value	Description
`phi_aa`	$\phi_\mathrm{aa}$	0.9	Corporate equity portfolio share
`phi_bb`	$\phi_\mathrm{bb}$	0.1	Corporate equity portfolio share

Finance linkages: Dynamic parameters

Name	Math	Value	Description
`xi_k`	$\xi_k$	0.5	Forward capital adjustment cost parameter

Name	Math	Value	Description
`ss_nr`	\(\mathit{nr}_\ss\)	1	S/S Population, Relative to global population component
`ss_nw_to_nn`	\(\tratio{\mathit{nw}}{\mathit{nn}}_\ss\)	0.65	S/S Share of working age population in total population
`ss_nf_to_nw`	\(\tratio{\mathit{nf}}{\mathit{nw}}_\ss\)	0.7	S/S Labor participation rate

Name	Math	Value	Description
`rho_nr`	\(\rho_\mathit{nr}\)	0.9	A/R Total population relative to global population component
`rho_nw`	\(\rho_\mathit{nw}\)	0.9	A/R Share of working age population in total population
`rho_nf`	\(\rho_\mathit{nf}\)	0.5	A/R Labor participation rate

Name	Math	Value	Description
`ss_zk`	\(\mathit{zk}_\mathrm{ss}\)	0.9	S/S Uncertainty discount factor on capital
`ss_zy`	\(\mathit{zy}_\mathrm{ss}\)	1	S/S Uncertainty discount factor on production cash flows
`beta`	\(\beta\)	0.95	Household discount factor
`delta`	\(\delta\)	0.15	Depreciation of production capital
`eta`	\(\eta\)	0.5	Inverse elasticity of labor supply
`eta0`	\(\eta_0\)	2.24516	Utility location parameter of labor supply
`nu_0`	\(\nu_0\)	0.481924	Intercept in current wealth utility
`nu_1`	\(\nu_1\)	0.07	Slope of current wealth utility
`upsilon_0`	\(\upsilon_0\)	0.308207	Level parameter in cost of utilization of production capital
`upsilon_1`	\(\upsilon_1\)	5	Inverse elasticity of cost of utilization of production capital

Name	Math	Value	Description
`rho_w`	\(\rho_w\)	0.5	A/R in real wage rate
`rho_zk`	\(\rho_\mathit{zk}\)	0.9	A/R in uncertainty discount factor on capital
`rho_zy`	\(\rho_\mathit{zy}\)	0.9	A/R in uncertainty discount factor on production cash flows
`chi`	\(\chi\)	1	Point of reference in consuptions switch
`chi_ch`	\(\chi_\mathit{ch}\)	0.3	Past consumption in reference consumption parameter
`chi_curr`	\(\chi_\mathit{curr}\)	0.6	Current income in reference consumption parameter
`xi_ih1`	\(\xi_\mathit{ih,1}\)	0	Type 1 investment adjustment cost parameter
`xi_ih2`	\(\xi_\mathit{ih,2}\)	0.8	Type 2 investment adjustment cost parameter
`theta_3`	\(\theta_3\)	0	Pressure relief valve for interest rate lower bound

Name	Math	Value	Description
`ss_ar`	\(\mathit{ar}_\ss\)	1	S/S Area specific productivity component
`gamma_n0`	\(\gamma_\mathit{n0}\)	0.333333	Share of overhead labor
`gamma_m`	\(\gamma_m\)	0.15	Share of intermediate imports in stage T-3 production
`gamma_uk`	\(\gamma_\mathit{uk}\)	0.3	Share of capital services in stage T-2 production
`gamma_q`	\(\gamma_q\)	0.05	Share of commodity inputs in stage T-1 production
`gamma_yz`	\(\gamma_\mathit{yz}\)	0.6	Share of roundabout intermediates in stage T-0 production
`mu_py`	\(\mu_\mathit{py}\)	1.1	Monopoly power (markup) of local producers
`mu_y3`	\(\mu_{y3}\)	1.3	Markup to cover overhead labor

Name	Math	Value	Description
`rho_ar`	\(\rho_\mathit{ar}\)	0.5	Autoregression in area specific productivity component
`zeta_py`	\(\zeta_\mathit{py}\)	0.5	Weight on S/S inflation in inflation indexation
`xi_y2`	\(\xi_{y2}\)	0.5	Stage T-2 input factor adjustment cost parameter
`xi_y1`	\(\xi_{y1}\)	2	Stage T-1 input factor adjustment cost parameter
`xi_py`	\(\xi_\mathit{py}\)	25	Price adjustment cost parameters

Name	Math	Value	Description
`ss_roc_pc`	\(\roc{\mathit{pc}}_\ss\)	1.03	S/S Price of private consumption, Rate of change
`floor`	\(\mathit{floor}\)	1	Switch for lower bound on short-term rate

Name	Math	Value	Description
`rho_r`	\(\rho_r\)	0.5	A/R in policy rate
`psi_pc`	\(\psi_\mathit{pc}\)	2.5	Monetary policy reaction to CPI
`psi_e`	\(\psi_e\)	0	Monetary policy reaction to nominal exchange rate
`psi_nh`	\(\psi_\mathit{nh}\)	0	Monetary policy reaction to real economic activity

Name	Math	Value	Description
`ss_dg_to_ngdp`	\(\tratio{\mathit{dg}}{\mathit{ngdp}}_\ss\)	0.4	S/S Government debt to GDP ratio
`ss_ncg_to_ngdp`	\(\tratio{\mathit{ncg}}{\mathit{ngdp}}_\ss\)	0.2	S/S Government consumption to GDP ratio
`ss_trm`	\(\mathit{trm}_\ss\)	0	S/S General import tariff rate

Name	Math	Value	Description
`tau_cg`	\(\tau_\mathit{cg}\)	0	Response in government consumption to government debt
`tau_txls1`	\(\tau_{\mathit{txls},1}\)	2.5	Response in type 1 lump-sum tax rate to government debt
`rho_cg`	\(\rho_\mathit{cg}\)	0.5	Autoregression in government consumption
`rho_txls1`	\(\rho_{\mathit{txls},1}\)	0.5	Autoregression in type 1 lump-sum tax rate
`rho_txls2`	\(\rho_{\mathit{txls},2}\)	0.5	Autoregression in type 2 lump-sum tax rate
`rho_trm`	\(\rho_\mathit{trm}\)	0	Autoregression in generate import tariff rate

Name	Math	Value	Description
`alpha`	\(\alpha\)	0.4	Import intensity of non-commodity exports
`gamma_xx`	\(\gamma_\mathit{xx}\)	0.5	Acceleration in exportable productivity
`theta_1`	\(\theta_1\)	0.1	Elasticity of household risk function wrt NFA
`theta_2`	\(\theta_2\)	1	Curvature of household risk function wrt NFA
`lambda`	\(\lambda\)	0.5	Share of local commodity production in world commodity production
`ss_zh_aut`	\(\mathit{zh}^\mathrm{aut}_\ss\)	0	S/S Autonomous component in country credit risk

Name	Math	Value	Description
`rho_zh_aut`	\(\rho_{\mathit{zh}}^\mathrm{aut}\)	0.7	A/R Autonomous component in country credit risk
`zeta_e`	\(\zeta_e\)	0.6	Weight on model-consistent expectations in exchange rate
`xi_y3`	\(\xi_{y3}\)	0.85	Adjustment cost parameter in stage t-3 production

Name	Math	Value	Description
`phi_aa`	\(\phi_\mathrm{aa}\)	0.9	Corporate equity portfolio share
`phi_bb`	\(\phi_\mathrm{bb}\)	0.1	Corporate equity portfolio share