% Matlab File: implendowment.m

%Chapter 1.  The basic model

%One good, endownment model with perfect capital mobility

%This program is part of the book "Open Economy Macroeconomics in
%Developing Countries" (forthcoming MIT Press) by Carlos A. Vegh. Use of
%this program or modifications thereof should be acknowledged by citing
%this manuscript.  This program is a modification of the original
%King, Plosser, and Rebelo's (1988) programs. I am grateful to Guillermo
%Vuletin for his help in writing this program.  

% Revised: June 2007

% This program requires as input the output of Program #2, namely 
% the markov decision rules as summarized by Mke and H. 

% IMPULSE RESPONSES

% The calculation of impulse reponses involves two elements.  First, it is 
% necessary to specify initial conditions for the controlled state(k). Second,
% one needs to specify an values of the exogenous variables, i.e.,
% an (ns+ne x 1) vector of initial conditions. Consider just
% a total factor productivity shock from the steady-state position.

%    a  y

S = zeros(ns+ne,1);
Key = menu('Choose a shock','a','y');
Key2 = input('Choose size of impulse   ');
S(Key,1) = Key2;
clear Key, Key2;
% S(1) = 10;


% Specify the number of periods for which the impulse response is to calculated

nir = 30;

% Initialize the impulse response matrix

IR=zeros(nir,ns+ne+ncs+nc+nf+ncs+1);

% Calculate the impulse reponse for the nir periods.
% Save the impulse response in the diary imp.out

%diary imp.out

for i=1:nir;
  %Index of Impulse Response Period;
    IR(i,1)=i;
  %State and Exogneous Variables;
    IR(i,2:ns+ne+1)=S';
  %Shadow Price, Controls and Other Flows;
    IR(i,ns+ne+2:ns+ne+ncs+nc+nf+ncs+1)=(H*S)';
  % Update the state vector:;
    S = Mke*S;
end
%'Impulse Response to Shock in Productivity'
%'Ordered as Follows'
%'Date  K  B  A  G  p TRF Lambda theta  C  N I/K  y  y/n  MPK  i tb r1 r2'
IR(1:nir,1:ns+ne+ncs+1);
IR(1:nir,ncs+ns+ne+2:ns+ne+ncs+nc+nf+ncs+1);


%diary off
'strike any key to see impulse response plots'
pause
plotimpendowment