PROGRAM DETAILS for "Taxation, Investment and Asset Pricing" by Santoro and Wei (2010)

The following programs have been used to simulate: 

(i)   the statistics from time series simulations in Tables 2-3
(ii)  the impulse response graphs in Figures 1-2


List of programs:

1) astax_red.mod, the main file which generates the time series simulations.
2) astcomp_red.m, the Matlab file which loads the output saved from running astax_red.mod, and computes all the statistics in Tables 2-3 using simulated data.   
3) irf_red.m, the Matlab file which loads the output saved from running astax_red.mod and plots the IRF in Figures 1-2.
4) output files generated by astax_red.mod for different specifications of our model:
	- b8e4_tax.mat (specification: b=0.8, eta=4, tau_c=0.432) 
	- b8e4_no.mat (specification: b=0.8, eta=4, tau_c=0.0)
	other *.mat files follow the same file name conventions. 

The steps to follow:

1. We use Dynare Version 3 (dynmat 3.065) to execute astax_red.mod and save model results for the benchmark case (b=0.8, eta=4, tau_c=0 or tau_c=0.432) in b8e4_no.mat and b8e4_tax.mat.

2. We run astcomp_red.m, which loads b8e4_tax.mat and produces model statistics in Table 2 (We find that astax_red.mod must be run using Dynare version 3 (dynmat 3.065), in order to be compatible with astcomp_red.m. Dynare 4 turns out to have different index conventions).

3. We run irf_red.m, which loads b8e4_no.mat and b8e4_tax.mat and plots impulse responses in Figure 1.

4. We manually vary the following parameters, b (habit persistence parameter), eta (adjustment cost parameter) and tau_c (corporate tax rate) and repeat Step 1-3 to generate the corresponding statistics in Table 3 and IRF in Figure 2, for the sensitivity analysis. The different specifications for the sensitivity analysis are:
	-  specification: b=0.8, eta=2, tau_c=0.432 (b8e2_tax.mat) 
	-  specification: b=0.8, eta=2, tau_c=0.0 (b8e2_no.mat)
	-  specification: b=0.4, eta=4, tau_c=0.432 (b4e4_tax.mat)
	-  specification: b=0.4, eta=4, tau_c=0.0 (b4e4_no.mat)
	-  specification: b=0, eta=0, tau_c=0.432 (rbc_tax.mat)
	-  specification: b=0, eta=0, tau_c=0.0 (rbc_no.mat)

All the files mentioned above are included in the folder.