' 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 chart in figure 11.3E ' discussed in par. 11.7.3 smpl @all ' Store original value of shocked value to baseline genr theta_0 = theta ' Decrease the income tax rate smpl 1960 @last theta = 0.21844 smpl @all ' Select Scenario 2b growth_mod.scenario(n, a="_2b") "Scenario 2b" ' Set simulation sample smpl 1947 @last ' Solve the model for the current sample growth_mod.solve ' Store shocked value to scenario genr theta_2b = theta ' and get back shocked variable to its baseline value theta = theta_0 ' Creates charts from simulated variables ' Creates the chart in Figure 11.3E smpl 1955 2020 graph fig11_3e.line y_k_2b/y_k_0 c_k_2b/c_k_0 fig11_3e.options linepat fig11_3e.scale(left) range(0.98,1.03) fig11_3e.setelem(1) lcolor(blue) lwidth(2) lpat(1) fig11_3e.setelem(2) lcolor(green) lwidth(2) lpat(2) fig11_3e.name(1) Real output fig11_3e.name(2) Real consumption fig11_3e.addtext(t, font("Arial", 12, +b)) Figure 11.3E: Evolution of real output and real consumption following a decrease in the income tax rate show fig11_3e