// Woodford "Control of Public Debt: A requirement for price stability?" 
// Basic simulation - Does not seem to work

var m, i, x, ex, p, d, q, e, eta;
varexo u, eps;

parameters chi,sigma, beta, kappa, lambda, gamma, phi_1, phi_2, phi_3 , rhoe, rhop, a, b, c;

chi = 1;
sigma = 1;
beta = 0.95;
kappa = 0.3;
lambda = 0.8;
gamma = 0.1;
rhoe = 0.99;
rhop = 0.00;
phi_1 = 0.1;
phi_2 = 0.5;
phi_3 = 0.5;
a = 0.5; 
b = 1.5;
c = 0;
  

model;

x = ex - sigma*(i - p(+1))+0.1*d + phi_1*q;
ex = x(+1)+ e;
p = beta*p(+1) + kappa*x - eta;
q = q(+1)- phi_2*(i - p(+1))+ phi_3*x;
d(+1) = i + (beta^-1)*(d-p)+gamma*(m(-1)-m-p);
m = chi*((sigma^-1)*x-(beta/(1-beta))*i);
i = a*x + b*p + c*q;
e = rhoe*e(-1) + u;
eta = rhop*eta(-1)+ eps;

end;

initval;
m = 0;
i = 0;
p = 0;
x = 0;
d = 0;
q = 0;
e = 0;
eta = 0;

end;

shocks;
var u; stderr 0.09;
var eps; stderr 0.09;
end;


stoch_simul(periods=210, irf=20);