"""
Parameters class for the New Keynesian 3-Equation (NK3E) model.
Source: A New Keynesian 3-Equation Model — https://macrosimulation.org/a_new_keynesian_3_equation_model
"""
__author__ = ["Mitja Devetak"]
__credits__ = ["Mitja Devetak"]
__license__ = "MIT"
__maintainer__ = ["Mitja Devetak"]
import logging
from macrostat.core.parameters import Parameters
logger = logging.getLogger(__name__)
[docs]
class ParametersNK3E(Parameters):
"""Parameters for the NK3E model.
Economic meaning:
- a1 (>0): sensitivity of demand to the real rate (steeper => interest rate
moves output more).
- a2 (>0): sensitivity of inflation to the output gap.
- b (>0): central bank weight on inflation deviations in its loss.
- A: autonomous demand (times multiplier).
- pi_T: inflation target.
- y_e: equilibrium (potential) output.
Hyperparameters control the simulation environment, not the economics, e.g.,
number of timesteps and progress bar usage.
"""
version = "NK3E"
def __init__(
self,
parameters: dict | None = None,
hyperparameters: dict | None = None,
bounds: dict | None = None,
*args,
**kwargs,
):
super().__init__(
parameters=parameters,
hyperparameters=hyperparameters,
*args,
**kwargs,
)
[docs]
def get_default_parameters(self):
"""Return the default parameter values for NK3E.
Notes
-----
- a3 is not a primitive; it is derived each step as
``1 / (a1 * (1/(a2*b) + a2))``.
- The three scenarios modify A, pi_T, or y_e around these baselines.
"""
return {
"a1": {
"lower bound": 0.0,
"upper bound": 10.0,
"notation": r"a_1",
"unit": ".",
"value": 0.3,
},
"a2": {
"lower bound": 0.0,
"upper bound": 10.0,
"notation": r"a_2",
"unit": ".",
"value": 0.7,
},
"b": {
"lower bound": 0.0,
"upper bound": 100.0,
"notation": r"b",
"unit": ".",
"value": 1.0,
},
"A": {
"lower bound": -1000.0,
"upper bound": 1000.0,
"notation": r"A",
"unit": ".",
"value": 10.0,
},
"pi_T": {
"lower bound": -100.0,
"upper bound": 100.0,
"notation": r"\pi^T",
"unit": "% per period",
"value": 2.0,
},
"y_e": {
"lower bound": -1000.0,
"upper bound": 1000.0,
"notation": r"y_e",
"unit": ".",
"value": 5.0,
},
}
[docs]
def get_default_hyperparameters(self):
hyper = super().get_default_hyperparameters()
hyper["timesteps"] = 50
hyper["timesteps_initialization"] = 1
hyper["sectors"] = [
"Macroeconomy",
]
# tqdm usage toggle (default off)
hyper["use_tqdm"] = False
return hyper
