You signed in with another tab or window. Reload to refresh your session.You signed out in another tab or window. Reload to refresh your session.You switched accounts on another tab or window. Reload to refresh your session.Dismiss alert
OG-Core allows users to specify gov't spending on non-pension transfers ($TR_t$), infrastructure ($I_{g,t}$), and gov't consumption expenditures ($G_t$) by providing the ratio of spending on these items to GDP with the parameters $\alpha_{tr,t}$, $\alpha_{G,t}$, and $\alpha_{I,t}$. This is helpful for calibrating the model as one doesn't need to worry about units of measurement.
However, this imposes a very specific assumption when looking at counterfactual scenarios. In particular, it implies that these gov't spending amounts grow with the economy (not a bad assumption given what we observe in the US, but it is limiting).
The parameter baseline_spending can hold spending amounts in the counterfactual simulation at the same level as in the baseline run. This allows one to avoid the assumption that the amount of spending will grow with the size of the economy.
However, one might wish to make changes in spending policy relative to the baseline level (not the baseline ratio to GDP, which can be done with the current parameters noted above). Thus, it would be useful to create 3 new share parameters that could specify the relative change from the baseline level of spending that would be impose when baseline_spending=True.
The text was updated successfully, but these errors were encountered:
OG-Core allows users to specify gov't spending on non-pension transfers ($TR_t$ ), infrastructure ($I_{g,t}$ ), and gov't consumption expenditures ($G_t$ ) by providing the ratio of spending on these items to GDP with the parameters $\alpha_{tr,t}$ , $\alpha_{G,t}$ , and $\alpha_{I,t}$ . This is helpful for calibrating the model as one doesn't need to worry about units of measurement.
However, this imposes a very specific assumption when looking at counterfactual scenarios. In particular, it implies that these gov't spending amounts grow with the economy (not a bad assumption given what we observe in the US, but it is limiting).
The parameter
baseline_spending
can hold spending amounts in the counterfactual simulation at the same level as in the baseline run. This allows one to avoid the assumption that the amount of spending will grow with the size of the economy.However, one might wish to make changes in spending policy relative to the baseline level (not the baseline ratio to GDP, which can be done with the current parameters noted above). Thus, it would be useful to create 3 new share parameters that could specify the relative change from the baseline level of spending that would be impose when
baseline_spending=True
.The text was updated successfully, but these errors were encountered: