' MODEL GROWTH for Eviews version 4.1 ' from Wynne Godley & Marc Lavoie ' MONETARY ECONOMICS ' Chapter 11 ' Before running this program you should have used GL11GROWTH ' to create a workfile and a baseline solution ' This program will generate the charts in figures 11.2A to 11.2B ' discussed in par. 11.7.2 smpl @all ' Store original value of shocked value to baseline genr omega0_0 =omega0 ' Increase the target wage rate smpl 1960 @last omega0 = -0.15 smpl @all ' Select the first alternative Scenario 1a growth_mod.scenario(n, a="_1a") "Scenario 1a" ' Set simulation sample smpl 1947 @last ' Solve the model for the current sample growth_mod.solve ' Store shocked value to scenario genr omega0_1a =omega0 ' and get back shocked variable to its baseline value omega0 = omega0_0 ' Creates charts from simulated variables ' Creates the chart in Figure 11.2A smpl 1955 2030 graph fig11_2a.line pi_1a*100 (w_1a/w_1a(-1)-1)*100 fig11_2a.options linepat fig11_2a.setelem(1) lcolor(blue) lwidth(2) lpat(1) fig11_2a.setelem(2) lcolor(green) lwidth(2) lpat(2) fig11_2a.name(1) Price inflation fig11_2a.name(2) Wage inflation fig11_2a.addtext(t) Figure 11.2A: Evolution of price and wage inflation following an increase in the target wage show fig11_2a ' Creates the chart in Figure 11.2B smpl 1955 2030 graph fig11_2b.line i_k_1a/i_k_0 y_k_1a/y_k_0 c_k_1a/c_k_0 fig11_2b.options linepat fig11_2b.setelem(1) lcolor(blue) lwidth(2) lpat(1) fig11_2b.setelem(2) lcolor(green) lwidth(2) lpat(2) fig11_2b.setelem(3) lcolor(red) lwidth(2) lpat(3) fig11_2b.name(1) Real fixed investment fig11_2b.name(2) Real output fig11_2b.name(3) Real consumption fig11_2b.addtext(t) Figure 11.2B: Evolution of i, c and y following an increase in the target real wage show fig11_2b