1 set

2 T time periods /2014*2064/
3 J producers /A,B/
4
5 ;
6
7 PARAMETERS
8 A(J,T) technology level parameter for production function
9 alpha(J) Expenditure shares of capital for production function
10 r discount rate
11 gl rate of labour force
12 delta depreciation rate
13 L0 labour force at t = 0 /5201/
14 K0 captial stock at t = 0 /194239/
15 LB(J,T) labour force of the sector A or B
16 gamma Share of good A and B in utility function
17
18 ;
19
20 *(1-delta)+I(J,T);

*Parameter values 21 A(J,T) = 1; 22 r=0.02; 23 gl = 0.01; 24 delta = 0.10; 25 alpha(“A”) = 0.2; 26 alpha(“B”) = 0.3; 27 gamma = 0.5; 28 29 30 VARIABLES 31 32 C(J,T) consumption 33 L(T) labour force at time t 34 K(J,T) capital 35 I(J,T) investment 36 S(J,T) savings 37 Y(J,T) economic activity or output 38 Y1(J,T) economic activity or output Y1 39 U utility 40 41 ; 42 43 44 POSITIVE VARIABLES C(J,T), L(T), K(J,T), I(J,T), Y1(J,T); 45 46 EQUATIONS 47 48 EQL(T) labour force at time t 49 EQLB(J,T) labour force A or B 50 EQK(J,T) capital 51 EQY(J,T) economic activity 52 EQY1(J,T) economic activity Y1 53 EQS(J,T) savings 54 EQU(T) utility 55 56 ; 57 58 EQL(T)… L(T) =E= L0*(1+gl)**(ORD(T)); 59 EQLB(J,T)… LB(“A”,T)+LB(“B”,T) =L= L(T); 60 EQK(J,T)… K(J,T) =E= (K0$(ord(T)=1)+K(J,T-1))

61 EQY(J,T)… Y(J,T) =E= A(J,T)

*K(J,T)*

62 EQY1(J,T)… Y(J,T) =E= C(J,T)+I(J,T);

63 EQS(J,T)… S(J,T) =E= I(J,T);

64 EQU(T) … U(T) =E= (C(“A”,T)**gamma)(C(“B”,T)

**alpha(J)*L(T)**(1-ALPHA(J));62 EQY1(J,T)… Y(J,T) =E= C(J,T)+I(J,T);

63 EQS(J,T)… S(J,T) =E= I(J,T);

64 EQU(T) … U(T) =E= (C(“A”,T)**gamma)

**(1-gamma))/((1+r)**(O

RD(T)));

65

66

67

68 L.L(T)=L0;

69 K.L(J,T)=K0;

70

71

72

73 MODEL INVEST /ALL/;

74 SOLVE INVEST USING DNLP MAXIMIZING U(T);

**** $148,257,409

75

76

77

78 DISPLAY Y.L, C.L, L.L, K.L, I.L, S.L, U.L;

**** $141 $141 $141 $141 $141

GAMS Rev 148 x86/MS Windows 08/26/14 16:13:07 Page 2

G e n e r a l A l g e b r a i c M o d e l i n g S y s t e m

Error Messages

141 Symbol neither initialized nor assigned

A wild shot: You may have spurious commas in the explanatory

text of a declaration. Check symbol reference list.

148 Dimension different - The symbol is referenced with more/less

indices as declared

257 Solve statement not checked because of previous errors

409 Unrecognizable item - skip to find a new statement

looking for a ‘;’ or a key word to get started again

–

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