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Steps to enrich the model #1

@jdebacker

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@jdebacker

The firm7.py script includes many of the building blocks of the model we are working towards (creates grids, solves firm problem via VFI, solves for the stationary distribution, and for the GE). But it lacks taxes and interesting corporate financial policies.

This issue outlines how we can progress from the simple model towards our goal of a rich model with with to analyze corporate tax reform options. These steps are:

    • Modularize the firm7.py script by breaking it into separate scripts that handle different pieces of the model. E.g., a script where all parameters are specified, an execute script that runs the model (which, to begin with, might also include the parameter specification), a script to solve the firm's problem with VFI, a script for the stationary distribution, a script for plotting functions, etc). We'll want to be sure we have an option switch between running the partial equilibrium version of the model and the general equilibrium version.
    • Add corporate income, capital gains, interest income, and dividend income tax rates to the model.
    • Add costly external finance to the model.
    • Write scripts to generate figures and tables of interest.
    • Write scripts to estimate model parameters via a Generalize Method of Moments approach using the necessary conditions from the firm's problem or via a Simulated Method of Moments approach (this will likely depend upon how we specify adjustment costs and the financial frictions in the model).

cc @ericcmiller

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