1. Abstracting from longrun growth by setting :1. = g = 0 nd from persistent shocks by setting pg 2 pg 2 0', with A, E {n.4, taxi and G, E Int}, tag, and normalizing the population to N = 1, the following nine equations describe the \"baseline\" REC model in Chapter 5: Y; = C,+.l't+Gt (1} Y: = 3.1(AtL01 (2} If. 2 K._1+I.6Kt_1 (3} A: = 5A,: (4} 6': 6G,: (5} rt _ a(A.L,fK._1}1'5 (6} \"'1: = (1lth1fAtLtlnAt (7} 1 1 a = as. lcr+1(1+\"+1)l (a) C: It); 14.. = F (9} where e_"' = ,8. [a] Find the steady state for this econom],r under the following calibration: o = 1 f 3, 6 = 0.05, f = 0.025, :5 = 1, and E = 0.5 and G' such that (if? = 0.2. In particular, nd the remaining parameter values 5 and p that are consistent 1Ilil'ith steady state and determine steadystate values for the endogenous variables, Y, (3', f, (3', K, and II). [b] Loglinearise the seven equations above excluding equations [:4) and (5)- for A"; and (it. (-3) Write a Dynare .mod le to simulate this economy. Assume that .5: = pAAHFI +6.4; and G: = pactl + 6.91; are the loglinearized shocks. Set or = 1,73, 6 = 0.05, pg = pg = .8, e'\" = 0.99, a\" = EEG = 1, and b = 1. Provide a graph of the impulse response of one standard deviation shock to technology and government spending. (Hint: This model is nearly identical to the one we went over in class. Rather than start from scratch try modiring the Dynare .mod I have provided on Canvas. Also, you need to use 51'? = 0.2 to gure out the steady parameter values needed to do your simulation.) [d] 1ir'liat is the eect of a positive government spending shock on the real wage? Explain