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This issue lays out the structure of this calibration. The steady-state parameter section of the code in execute.py should have a parameter named calibrate_n. This parameter should be a boolean that equals True if you want to calibrate the S disutility of labor level parameters chi^n_s. Its value should be set to False if one does not want to estimate those parameters and just take them as exogenous inputs.
If calibrate_n = True, then the code must perform two steps.
Use the household Euler equations for labor supply to calculate chi^n_s_hat. Use CPS data for labor supply. @hayleefay and I wrote some nice code for this in the CPS_hrs_age repository. Get consumption data from the Consumer Expenditure Survey. The chi^n_s_hat values are related to the chi_n_s values in the model by the equation chi_n_s = (factor ** (sigma - 1)) * chi_n_s_hat.
Given the chi^n_s_hat values calculated from the Euler equations and a guess for the factor, we can solve the model. We solve for the factor by including it in the outer loop of the steady-state solution method with the interest rate r, such that factor = (data avg hh inc) / (model avg ss hh inc).
If calibrate_n = False, then solve the model with just r in the outer loop of the steady-state computation.
This issue lays out the structure of this calibration. The steady-state parameter section of the code in
execute.py
should have a parameter namedcalibrate_n
. This parameter should be a boolean that equalsTrue
if you want to calibrate theS
disutility of labor level parameterschi^n_s
. Its value should be set toFalse
if one does not want to estimate those parameters and just take them as exogenous inputs.If
calibrate_n = True
, then the code must perform two steps.Use the household Euler equations for labor supply to calculate
chi^n_s_hat
. Use CPS data for labor supply. @hayleefay and I wrote some nice code for this in theCPS_hrs_age
repository. Get consumption data from the Consumer Expenditure Survey. Thechi^n_s_hat
values are related to thechi_n_s
values in the model by the equationchi_n_s = (factor ** (sigma - 1)) * chi_n_s_hat
.Given the
chi^n_s_hat
values calculated from the Euler equations and a guess for thefactor
, we can solve the model. We solve for thefactor
by including it in the outer loop of the steady-state solution method with the interest rater
, such thatfactor = (data avg hh inc) / (model avg ss hh inc)
.If
calibrate_n = False
, then solve the model with justr
in the outer loop of the steady-state computation.@SophiaMo
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