Greenwood et al. (1993) - Putting Home Economics into Macroeconomics

This repository replicates the models by Greenwood et al. (1993) - Putting Home Economics into Macroeconomics. You can find the complete Dynare outputs and formal model definitions on manuelbieri.ch/Greenwood_1993/.

Contents

• Models
• Dependencies
• Run Code
• Project Structure
• Docs

Models

The numbering of the models is replicated from the original paper:

• Model 1: Model with home production minimized
• Model 2: Model with increased willingness to substitute between home and market
• Model 3: Model with increased incentive to substitute between home and market
• Model 4: Model with a more general home production function and highly correlated technology shocks

Additional models (not included in Greenwood et al., 1993):

• Model 2a: Adjusts Model 2 according to the suggestions of Greenwood et al. (1993) to increase the standard deviation of the home technology shock
• Model 4a: Adjusts Model 4 to score a more appropriate correlation between home and business investments

Dependencies

• Matlab (>=2021b)
• Dynare (>=5.3)

Otherwise, the code might (partly) not work. The code and scripts are tested on macOS 13.3 and Windows 11 (ARM).

Run Code

Matlab Interface

1. Open run_models.m and set project_path/models as working directory
2. Run the first and second section
   • Note: You may need to adjust the path to Dynare
3. Run the sections containing the models, you wish to simulate

Command Line

Open the command line with at the project root and run the following commands.

cd models
/Applications/MATLAB_R2021b.app/bin/matlab -nodesktop -nosplash -r "run_models"

Note: You may need to adjust the path to matlab (in the previous command) or dynare (in the file "run_models.m").

Project Structure

Generate a more detailed project tree with the following command (only works with Git):

/bin/zsh project_tree.sh

Note: See the model definitions at the beginning of this document.

Greenwood_1993.prj                      # Matlab project file
LICENSE
README.md
docs                                    # Files for the documentation website
models
   |-- Files                            # Output directory for graphs
   |-- Functions                        # Matlab functions used in run_models.m
   |   |-- AddDynare.m                      # Add dynare path to project path
   |   |-- CleanUp.m                        # Cleans up whole matlab environment
   |   |-- GenerateIRFPlot.m                # Generate graph with interesting IRFs
   |   |-- GenerateTable.m                  # Replicate table in Greenwood et al. (1993)
   |   |-- SaveMoments.m                    # Helper function for GenerateTable.m
   |-- Hooks                            # Components for dynare models (reusable)
   |   |-- Initval                          # Initial guess components
   |   |   |-- level.mod                        # Steady state for level models
   |   |   |-- log.mod                          # Steady state for log models
   |   |-- Run.mod                          # Run instructions for Dynare
   |   |-- SteadyState.mod                  # Deterministic steady state
   |   |-- Variables_Parameters.mod         # Variable and parameter definitions
   |   |-- Write.mod                        # Write model, variable and parameter definitions to latex
   |   |-- preamble.mod                     # Print generic info
   |-- Model1_Level.mod
   |-- Model1_Log.mod
   |-- Model2_Level.mod
   |-- Model2_Log.mod
   |-- Model2a_Log.mod
   |-- Model3_Level.mod
   |-- Model3_Log.mod
   |-- Model4_Level.mod
   |-- Model4_Log.mod
   |-- Model4a_Log.mod
   |-- Replication_Effects_Home_RBC.csv # Replicated table of Greenwood et al. (1993)
   |-- run_models.m                     # Matlab file to run all models and functions
prepare_docs.sh                         # Bash file to prepare files for documentation website
resources                               # Matlab project files

Docs

/bin/zsh prepare_docs.sh

After running this shell-file, the docs-directory will contain a webpage with the latest outputs, which can be served with Jekyll. Make sure to run all models before generating the documentation, in order to mirror the latest changes. Finally, to locally generate the website, install Ruby and Jekyll and run the following commands from the project root in the terminal:

cd docs
bundle exec jekyll serve