Great Depressions of the Twentieth Century

Editors: Timothy J. Kehoe and Edward C. Prescott


Computer Programs

The files below demonstrate how to calibrate the neoclassical growth model and then solve the model numerically, using data from Finland as an example.

BaseCaseCalibration.xls calibrates model parameters and derives a sequence of TFP values in the ‘calibration’ worksheet. The parameters are also saved in paramBase.txt, and the series of TFP values along with labor endowment and taxes are saved in dataBase.txt. The MATLAB program depressions.m uses these text files and solveModel.m to solve the model numerically. The output this program saves to output.xls can be used to generate the graphs in BaseCaseCalibration.xls.

These files can be used to model any economy over any period by replacing the data in BaseCaseCalibration.xls and saving the results in the correct format to paramBase.txt and dataBase.txt.; Below is an overview of the calibration procedures, the MATLAB programs, and using the files on your own data. More details can be found in the files themselves.