' MODEL GROWTH for Eviews version 6 ' 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 11.2C and 11.2D ' discussed in par. 11.7.2 smpl @all ' Store original value of shocked value to baseline genr omega0_0 = omega0 genr r_b_bar_0 = r_b_bar ' Increase the target wage rate smpl 1960 @last omega0 = -0.15 r_b_bar = r_b_bar + 0.011 smpl @all ' Select the alternative Scenario 1b growth_mod.scenario(n, a="_1b") "Scenario 1b" ' Set simulation sample smpl 1947 @last ' Solve the model for the current sample growth_mod.solve(i=p) ' Store shocked value to scenario genr omega0_1b =omega0 genr r_b_bar_1b = r_b_bar ' and get back shocked variable to its baseline value omega0 = omega0_0 r_b_bar = r_b_bar_0 ' Creates charts from simulated variables ' Creates the chart in Figure 11.2C smpl 1955 2020 graph fig11_2c.line r_b_1b-pi_1b fig11_2c.options linepat fig11_2c.setelem(1) lcolor(blue) lwidth(2) lpat(1) fig11_2c.name(1) Real interest rate on bills fig11_2c.addtext(t,just(c),just(c)) Figure 11.2C: Evolution of the real interest rate on bills following an increase in the target wage show fig11_2c ' Creates the chart in Figure 11.2D smpl 1955 2020 graph fig11_2d.line y_k_1b/y_k_0 fig11_2d.options linepat fig11_2d.scale(left) range(0.94,1.01) fig11_2d.setelem(1) lcolor(blue) lwidth(2) lpat(1) fig11_2d.name(1) Real output fig11_2d.addtext(t,just(c),just(c)) Figure 11.2D: Evolution of real output following an increase in the target wage show fig11_2d