Appendix 5 Equations for the dynamic model
PRODUCTION BLOCK
NSR: NSR=1000000/(a1)*((YSR/1000000)**RHO -(A2A*KBF/1000000)**RHO)**(1/RHO),
RPYSR: RPYSR=RWA/(a1)*(((a1)*NSR/(A2A*KBF)) **(-RHO)+1)**((RHO-1)/RHO),
RPTSR: RPTSR=((RPYSR/A4A)**(DELTA/(DELTA-1)) +(RPM/(A3))**(DELTA/(DELTA-1)))**((DELTA-1)/DELTA),
RPYDMR: RPYDMR=A6A*(RPTSR**(THETA/(THETA-1)) -(RPTEX/(A5))**(THETA/(THETA-1)))**((THETA-1)/THETA),
TSR: TSR=A6A*YD*(RPYDMR/(A6A*RPTSR))**(1/(1-THETA)),
YSR: YSR=1/A4A*(TSR**DELTA-((A3)*IMSR)**DELTA)**(1/DELTA),
EXRSR: EXRSR=TSR/(A5) *(RPTEX/((A5)*RPTSR))**(1/(THETA-1)),
IMSR: IMSR=A4A*YSR/(A3)*((RPM/((A3)*RPTSR))**(DELTA/(1-DELTA))-1) **(-1/DELTA),
A1: A1=A1(-1)*EXP(BETA*0.25),
A3: A3=A3(-1)*EXP(π1*0.25),
A5: A5=A5(-1)*EXP(π2*0.25),
RGDP: RGDP=RPTEX*TEXP+RPYD*YD-RPM*IM+NGG*RWA
+CONH*RPCONH+RPTEX*IIE+POL4_EQ*RPYD*CONO,
GR: LOG(GR)=0.5*POPGR_EQ+0.5*POPGR_EQ(-1)
+0.5*(BETA*0.25)+0.5*(BETA(-1)*0.25),
REAL EXCHANGE RATES
RPM: RPM=(1+POL5_EQ)*PIMF/(RER),
RPTEX: RER=(PTEXF)/(RPTEX),
LDGPR: LDGDPR=LOG(DGDPR/FDGDPR),
RE: RE = (((0.25*ERE+0.25*ERE(-1)*EXP(INF_TAR)
+0.25*ERE(-2)*EXP(INF_TAR*2)+0.25*ERE(-3)*EXP(INF_TAR*3))
- 1.2* LDGDPR(4)-1.2*LDGDPR(5)) ),
RER: RER=(1-C1600)*RER(-1)*EXP(INF_TAR)+
C1600*RE*(1+RCS/400-INF) /(1+(RCSFB+RPRCS)/400-INFW)
LABOUR MARKET
NTS: PARTT=100*NTS/(RPOP3*(POP3+POP4)),
PARTT: PARTT= C2001*PARTT(-1)+C2002*(PARTT_EQ)+C2003*(NAIRU(-1)-URT(-1)),
NT: LOG(NT-NGG_EQ) = (C1001*LOG((NSR(-1))*EXP(POPGR_eq))
+(1-C1001)*LOG((NT(-1)-NGG_EQ(-1))*EXP(POPGR_eq)))+Z_NT,
POPGR_EQ: POPGR_EQ=LOG(POP3_EQ+POP4_EQ)
-LOG(POP3_EQ(-1)+POP4_EQ(-1)),
URT: URT=100*(1-NT/NTS),
CONSUMPTION SECTOR
COND: LOG(COND)=C0101+C0102*LOG((1-POL1)*RWA*(NT)+RTRPUPR
+RTROSPR+RMTRANSFER)+
(1-C0102)*LOG(RB-RZPA-ZP/RER+KH+KBF)-RLPCON,
RPCONHD: LOG(RPCONHD)=(C0200+C0202*LOG(CONH/CONO)+C0201*TREND) +LOG(1+POL4_EQ),
RPCONH: LOG(RPCONH/RPCONH(-1))=
C0601*LOG(RPCONH(-1)/RPCONH(-2))+C0602*(LOG(CONO(-1)/CONH(-1))
-LOG(CONO(-2)/CONH(-2)))+C0603*(LOG(RPCONH(-1)/RPCONHD(-1))),
CONO: CONO=CON-CONH,
CON: LOG(CON) = C0401*LOG(COND)+(1-C0401)*LOG(CON(-1)*GR)
+C0402*(YCURVE(-2))+C0403*(RPM(-1)-ERPM(-1))+
C404*(RPM(-2)-ERPM(-2))+Z_CON,
CONH: CONH=KSRATIO*KH,
RINCOME: RINCOME=(1-POL1)*RWA*(NT)+RTRPUPR
+RTROSPR+RMTRANSFER,
RWEALTH: RWEALTH= (RB-RZPA-ZP/RER+KH+KBF),
RLPCON: RLPCON=LOG((CONO*(1+POL4_EQ)+CONH*RPCONH)/CON),
