def test_MTR_income(etr_params, mtr_params, params, mtr_capital, expected):
# Test the MTR on income function
r = 0.04
w = 1.2
b = np.array([0.4, 0.3, 0.5])
n = np.array([0.8, 0.4, 0.7])
factor = 110000
test_mtr = tax.MTR_income(r, w, b, n, factor, mtr_capital,
params.e, etr_params, mtr_params, params)
assert np.allclose(test_mtr, expected)
def SS_solver(bmat, nmat, r, BQ, TR, factor, Y, p, client, fsolve_flag=False):
'''
Solves for the steady state distribution of capital, labor, as well
as w, r, TR and the scaling factor, using functional iteration.
Args:
bmat (Numpy array): initial guess at savings, size = SxJ
nmat (Numpy array): initial guess at labor supply, size = SxJ
r (scalar): real interest rate
BQ (array_like): aggregate bequest amount(s)
TR (scalar): lump sum transfer amount
factor (scalar): scaling factor converting model units to dollars
Y (scalar): real GDP
p (OG-Core Specifications object): model parameters
client (Dask client object): client
Returns:
output (dictionary): dictionary with steady state solution
results
'''
dist = 10
iteration = 0
dist_vec = np.zeros(p.maxiter)
maxiter_ss = p.maxiter
nu_ss = p.nu
if fsolve_flag: # case where already solved via SS_fsolve
maxiter_ss = 1
while (dist > p.mindist_SS) and (iteration < maxiter_ss):
# Solve for the steady state levels of b and n, given w, r,
# Y and factor
if p.budget_balance:
outer_loop_vars = (bmat, nmat, r, BQ, TR, factor)
else:
outer_loop_vars = (bmat, nmat, r, BQ, Y, TR, factor)
(euler_errors, new_bmat, new_nmat, new_r, new_r_gov, new_r_p,
new_w, new_TR, new_Y, new_factor, new_BQ,
average_income_model) =\
inner_loop(outer_loop_vars, p, client)
r = utils.convex_combo(new_r, r, nu_ss)
factor = utils.convex_combo(new_factor, factor, nu_ss)
BQ = utils.convex_combo(new_BQ, BQ, nu_ss)
if p.baseline_spending:
Y = utils.convex_combo(new_Y, Y, nu_ss)
if Y != 0:
dist = np.array(
[utils.pct_diff_func(new_r, r)] +
list(utils.pct_diff_func(new_BQ, BQ)) +
[utils.pct_diff_func(new_Y, Y)] +
[utils.pct_diff_func(new_factor, factor)]).max()
else:
# If Y is zero (if there is no output), a percent difference
# will throw NaN's, so we use an absolute difference
dist = np.array(
[utils.pct_diff_func(new_r, r)] +
list(utils.pct_diff_func(new_BQ, BQ)) + [abs(new_Y - Y)] +
[utils.pct_diff_func(new_factor, factor)]).max()
else:
TR = utils.convex_combo(new_TR, TR, nu_ss)
dist = np.array([utils.pct_diff_func(new_r, r)] +
list(utils.pct_diff_func(new_BQ, BQ)) +
[utils.pct_diff_func(new_TR, TR)] +
[utils.pct_diff_func(new_factor, factor)]).max()
dist_vec[iteration] = dist
# Similar to TPI: if the distance between iterations increases, then
# decrease the value of nu to prevent cycling
if iteration > 10:
if dist_vec[iteration] - dist_vec[iteration - 1] > 0:
nu_ss /= 2.0
print('New value of nu:', nu_ss)
iteration += 1
if VERBOSE:
print('Iteration: %02d' % iteration, ' Distance: ', dist)
# Generate the SS values of variables, including euler errors
bssmat_s = np.append(np.zeros((1, p.J)), bmat[:-1, :], axis=0)
bssmat_splus1 = bmat
nssmat = nmat
rss = r
r_gov_ss = fiscal.get_r_gov(rss, p)
TR_ss = TR
Lss = aggr.get_L(nssmat, p, 'SS')
Bss = aggr.get_B(bssmat_splus1, p, 'SS', False)
(Dss, D_d_ss, D_f_ss, new_borrowing, debt_service,
new_borrowing_f) = fiscal.get_D_ss(r_gov_ss, Y, p)
K_demand_open_ss = firm.get_K(Lss, p.world_int_rate[-1], p, 'SS')
Kss, K_d_ss, K_f_ss = aggr.get_K_splits(Bss, K_demand_open_ss, D_d_ss,
p.zeta_K[-1])
Yss = firm.get_Y(Kss, Lss, p, 'SS')
r_p_ss = aggr.get_r_p(rss, r_gov_ss, Kss, Dss)
# Note that implicity in this computation is that immigrants'
# wealth is all in the form of private capital
I_d_ss = aggr.get_I(bssmat_splus1, K_d_ss, K_d_ss, p, 'SS')
Iss = aggr.get_I(bssmat_splus1, Kss, Kss, p, 'SS')
wss = new_w
BQss = new_BQ
factor_ss = factor
bqssmat = household.get_bq(BQss, None, p, 'SS')
trssmat = household.get_tr(TR_ss, None, p, 'SS')
ubissmat = p.ubi_nom_array[-1, :, :] / factor_ss
theta = tax.replacement_rate_vals(nssmat, wss, factor_ss, None, p)
# Compute effective and marginal tax rates for all agents
etr_params_3D = np.tile(
np.reshape(p.etr_params[-1, :, :], (p.S, 1, p.etr_params.shape[2])),
(1, p.J, 1))
mtrx_params_3D = np.tile(
np.reshape(p.mtrx_params[-1, :, :], (p.S, 1, p.mtrx_params.shape[2])),
(1, p.J, 1))
mtry_params_3D = np.tile(
np.reshape(p.mtry_params[-1, :, :], (p.S, 1, p.mtry_params.shape[2])),
(1, p.J, 1))
mtry_ss = tax.MTR_income(r_p_ss, wss, bssmat_s, nssmat, factor, True, p.e,
etr_params_3D, mtry_params_3D, p)
mtrx_ss = tax.MTR_income(r_p_ss, wss, bssmat_s, nssmat, factor, False, p.e,
etr_params_3D, mtrx_params_3D, p)
etr_ss = tax.ETR_income(r_p_ss, wss, bssmat_s, nssmat, factor, p.e,
etr_params_3D, p)
taxss = tax.net_taxes(r_p_ss, wss, bssmat_s, nssmat, bqssmat, factor_ss,
trssmat, ubissmat, theta, None, None, False, 'SS',
p.e, etr_params_3D, p)
cssmat = household.get_cons(r_p_ss, wss, bssmat_s, bssmat_splus1, nssmat,
bqssmat, taxss, p.e, p.tau_c[-1, :, :], p)
yss_before_tax_mat = household.get_y(r_p_ss, wss, bssmat_s, nssmat, p)
Css = aggr.get_C(cssmat, p, 'SS')
(total_tax_revenue, iit_payroll_tax_revenue, agg_pension_outlays,
UBI_outlays, bequest_tax_revenue, wealth_tax_revenue, cons_tax_revenue,
business_tax_revenue, payroll_tax_revenue,
iit_revenue) = aggr.revenue(r_p_ss, wss, bssmat_s, nssmat, bqssmat,
cssmat, Yss, Lss, Kss, factor, ubissmat,
theta, etr_params_3D, p, 'SS')
Gss = fiscal.get_G_ss(Yss, total_tax_revenue, agg_pension_outlays, TR_ss,
UBI_outlays, new_borrowing, debt_service, p)
# Compute total investment (not just domestic)
Iss_total = aggr.get_I(None, Kss, Kss, p, 'total_ss')
# solve resource constraint
# net foreign borrowing
debt_service_f = fiscal.get_debt_service_f(r_p_ss, D_f_ss)
RC = aggr.resource_constraint(Yss, Css, Gss, I_d_ss, K_f_ss,
new_borrowing_f, debt_service_f, r_p_ss, p)
if VERBOSE:
print('Foreign debt holdings = ', D_f_ss)
print('Foreign capital holdings = ', K_f_ss)
print('resource constraint: ', RC)
if Gss < 0:
print('Steady state government spending is negative to satisfy' +
' budget')
if ENFORCE_SOLUTION_CHECKS and (np.absolute(RC) > p.mindist_SS):
print('Resource Constraint Difference:', RC)
err = 'Steady state aggregate resource constraint not satisfied'
raise RuntimeError(err)
# check constraints
household.constraint_checker_SS(bssmat_splus1, nssmat, cssmat, p.ltilde)
euler_savings = euler_errors[:p.S, :]
euler_labor_leisure = euler_errors[p.S:, :]
if VERBOSE:
print('Maximum error in labor FOC = ',
np.absolute(euler_labor_leisure).max())
print('Maximum error in savings FOC = ',
np.absolute(euler_savings).max())
# Return dictionary of SS results
output = {
'Kss': Kss,
'K_f_ss': K_f_ss,
'K_d_ss': K_d_ss,
'Bss': Bss,
'Lss': Lss,
'Css': Css,
'Iss': Iss,
'Iss_total': Iss_total,
'I_d_ss': I_d_ss,
'nssmat': nssmat,
'Yss': Yss,
'Dss': Dss,
'D_f_ss': D_f_ss,
'D_d_ss': D_d_ss,
'wss': wss,
'rss': rss,
'total_taxes_ss': taxss,
'ubissmat': ubissmat,
'r_gov_ss': r_gov_ss,
'r_p_ss': r_p_ss,
'theta': theta,
'BQss': BQss,
'factor_ss': factor_ss,
'bssmat_s': bssmat_s,
'cssmat': cssmat,
'bssmat_splus1': bssmat_splus1,
'yss_before_tax_mat': yss_before_tax_mat,
'bqssmat': bqssmat,
'TR_ss': TR_ss,
'trssmat': trssmat,
'Gss': Gss,
'total_tax_revenue': total_tax_revenue,
'business_tax_revenue': business_tax_revenue,
'iit_payroll_tax_revenue': iit_payroll_tax_revenue,
'iit_revenue': iit_revenue,
'payroll_tax_revenue': payroll_tax_revenue,
'agg_pension_outlays': agg_pension_outlays,
'UBI_outlays_SS': UBI_outlays,
'bequest_tax_revenue': bequest_tax_revenue,
'wealth_tax_revenue': wealth_tax_revenue,
'cons_tax_revenue': cons_tax_revenue,
'euler_savings': euler_savings,
'debt_service_f': debt_service_f,
'new_borrowing_f': new_borrowing_f,
'debt_service': debt_service,
'new_borrowing': new_borrowing,
'euler_labor_leisure': euler_labor_leisure,
'resource_constraint_error': RC,
'etr_ss': etr_ss,
'mtrx_ss': mtrx_ss,
'mtry_ss': mtry_ss
}
return output
def FOC_labor(r, w, b, b_splus1, n, bq, factor, tr, ubi, theta, chi_n, e,
tau_c, etr_params, mtrx_params, t, j, p, method):
r'''
Computes errors for the FOC for labor supply in the steady
state. This function is usually looped through over J, so it does
one lifetime income group at a time.
.. math::
w_t e_{j,s}\bigl(1 - \tau^{mtrx}_{s,t}\bigr)
(c_{j,s,t})^{-\sigma} = \chi^n_{s}
\biggl(\frac{b}{\tilde{l}}\biggr)\biggl(\frac{n_{j,s,t}}
{\tilde{l}}\biggr)^{\upsilon-1}\Biggl[1 -
\biggl(\frac{n_{j,s,t}}{\tilde{l}}\biggr)^\upsilon\Biggr]
^{\frac{1-\upsilon}{\upsilon}}
Args:
r (array_like): the real interest rate
w (array_like): the real wage rate
b (Numpy array): household savings
b_splus1 (Numpy array): household savings one period ahead
n (Numpy array): household labor supply
bq (Numpy array): household bequests received
factor (scalar): scaling factor converting model units to dollars
tr (Numpy array): government transfers to household
ubi (Numpy array): universal basic income payment
theta (Numpy array): social security replacement rate for each
lifetime income group
chi_n (Numpy array): utility weight on the disutility of labor
supply
e (Numpy array): effective labor units
tau_c (array_like): consumption tax rates
etr_params (Numpy array): parameters of the effective tax rate
functions
mtrx_params (Numpy array): parameters of the marginal tax rate
on labor income functions
t (int): model period
j (int): index of ability type
p (OG-Core Specifications object): model parameters
method (str): adjusts calculation dimensions based on 'SS' or
'TPI'
Returns:
FOC_error (Numpy array): error from FOC for labor supply
'''
if method == 'SS':
tau_payroll = p.tau_payroll[-1]
elif method == 'TPI_scalar': # for 1st donut ring only
tau_payroll = p.tau_payroll[0]
else:
length = r.shape[0]
tau_payroll = p.tau_payroll[t:t + length]
if method == 'TPI':
if b.ndim == 2:
r = r.reshape(r.shape[0], 1)
w = w.reshape(w.shape[0], 1)
tau_payroll = tau_payroll.reshape(tau_payroll.shape[0], 1)
taxes = tax.net_taxes(r, w, b, n, bq, factor, tr, ubi, theta, t, j, False,
method, e, etr_params, p)
cons = get_cons(r, w, b, b_splus1, n, bq, taxes, e, tau_c, p)
deriv = (1 - tau_payroll - tax.MTR_income(r, w, b, n, factor, False, e,
etr_params, mtrx_params, p))
FOC_error = (marg_ut_cons(cons, p.sigma) * (1 /
(1 + tau_c)) * w * deriv * e -
marg_ut_labor(n, chi_n, p))
return FOC_error
def FOC_savings(r, w, b, b_splus1, n, bq, factor, tr, ubi, theta, e, rho,
tau_c, etr_params, mtry_params, t, j, p, method):
r'''
Computes Euler errors for the FOC for savings in the steady state.
This function is usually looped through over J, so it does one
lifetime income group at a time.
.. math::
c_{j,s,t}^{-\sigma} = e^{-\sigma g_y}
\biggl[\chi^b_j\rho_s(b_{j,s+1,t+1})^{-\sigma} +
\beta_j\bigl(1 - \rho_s\bigr)\Bigl(1 + r_{t+1}
\bigl[1 - \tau^{mtry}_{s+1,t+1}\bigr]\Bigr)
(c_{j,s+1,t+1})^{-\sigma}\biggr]
Args:
r (array_like): the real interest rate
w (array_like): the real wage rate
b (Numpy array): household savings
b_splus1 (Numpy array): household savings one period ahead
b_splus2 (Numpy array): household savings two periods ahead
n (Numpy array): household labor supply
bq (Numpy array): household bequests received
factor (scalar): scaling factor converting model units to dollars
tr (Numpy array): government transfers to household
ubi (Numpy array): universal basic income payment
theta (Numpy array): social security replacement rate for each
lifetime income group
e (Numpy array): effective labor units
rho (Numpy array): mortality rates
tau_c (array_like): consumption tax rates
etr_params (Numpy array): parameters of the effective tax rate
functions
mtry_params (Numpy array): parameters of the marginal tax rate
on capital income functions
t (int): model period
j (int): index of ability type
p (OG-Core Specifications object): model parameters
method (str): adjusts calculation dimensions based on 'SS' or
'TPI'
Returns:
euler (Numpy array): Euler error from FOC for savings
'''
if j is not None:
chi_b = p.chi_b[j]
beta = p.beta[j]
else:
chi_b = p.chi_b
beta = p.beta
if method == 'SS':
h_wealth = p.h_wealth[-1]
m_wealth = p.m_wealth[-1]
p_wealth = p.p_wealth[-1]
else:
h_wealth = p.h_wealth[t]
m_wealth = p.m_wealth[t]
p_wealth = p.p_wealth[t]
taxes = tax.net_taxes(r, w, b, n, bq, factor, tr, ubi, theta, t, j, False,
method, e, etr_params, p)
cons = get_cons(r, w, b, b_splus1, n, bq, taxes, e, tau_c, p)
deriv = ((1 + r) - (r * tax.MTR_income(r, w, b, n, factor, True, e,
etr_params, mtry_params, p)) -
tax.MTR_wealth(b, h_wealth, m_wealth, p_wealth))
savings_ut = (rho * np.exp(-p.sigma * p.g_y) * chi_b *
b_splus1**(-p.sigma))
euler_error = np.zeros_like(n)
if n.shape[0] > 1:
euler_error[:-1] = (
marg_ut_cons(cons[:-1], p.sigma) * (1 / (1 + tau_c[:-1])) - beta *
(1 - rho[:-1]) * deriv[1:] * marg_ut_cons(cons[1:], p.sigma) *
(1 / (1 + tau_c[1:])) * np.exp(-p.sigma * p.g_y) - savings_ut[:-1])
euler_error[-1] = (marg_ut_cons(cons[-1], p.sigma) *
(1 / (1 + tau_c[-1])) - savings_ut[-1])
else:
euler_error[-1] = (marg_ut_cons(cons[-1], p.sigma) *
(1 / (1 + tau_c[-1])) - savings_ut[-1])
return euler_error
def run_TPI(p, client=None):
'''
Solve for transition path equilibrium of OG-Core.
Args:
p (OG-Core Specifications object): model parameters
client (Dask client object): client
Returns:
output (dictionary): dictionary with transition path solution
results
'''
# unpack tuples of parameters
initial_values, ss_vars, theta, baseline_values = get_initial_SS_values(p)
(B0, b_sinit, b_splus1init, factor, initial_b, initial_n) =\
initial_values
(TRbaseline, Gbaseline, D0_baseline) = baseline_values
# Create time path of UBI household benefits and aggregate UBI outlays
ubi = p.ubi_nom_array / factor
UBI = aggr.get_L(ubi[:p.T], p, 'TPI')
print('Government spending breakpoints are tG1: ', p.tG1, '; and tG2:',
p.tG2)
# Initialize guesses at time paths
# Make array of initial guesses for labor supply and savings
guesses_b = utils.get_initial_path(initial_b, ss_vars['bssmat_splus1'], p,
'ratio')
guesses_n = utils.get_initial_path(initial_n, ss_vars['nssmat'], p,
'ratio')
b_mat = guesses_b
n_mat = guesses_n
ind = np.arange(p.S)
# Get path for aggregate savings and labor supply
L_init = np.ones((p.T + p.S, )) * ss_vars['Lss']
B_init = np.ones((p.T + p.S, )) * ss_vars['Bss']
L_init[:p.T] = aggr.get_L(n_mat[:p.T], p, 'TPI')
B_init[1:p.T] = aggr.get_B(b_mat[:p.T], p, 'TPI', False)[:p.T - 1]
B_init[0] = B0
K_init = B_init * ss_vars['Kss'] / ss_vars['Bss']
K = K_init
K_d = K_init * ss_vars['K_d_ss'] / ss_vars['Kss']
K_f = K_init * ss_vars['K_f_ss'] / ss_vars['Kss']
L = L_init
B = B_init
Y = np.zeros_like(K)
Y[:p.T] = firm.get_Y(K[:p.T], L[:p.T], p, 'TPI')
Y[p.T:] = ss_vars['Yss']
r = np.zeros_like(Y)
r[:p.T] = firm.get_r(Y[:p.T], K[:p.T], p, 'TPI')
r[p.T:] = ss_vars['rss']
# For case where economy is small open econ
r[p.zeta_K == 1] = p.world_int_rate[p.zeta_K == 1]
# Compute other interest rates
r_gov = fiscal.get_r_gov(r, p)
r_p = aggr.get_r_p(r, r_gov, K, ss_vars['Dss'])
# compute w
w = np.zeros_like(r)
w[:p.T] = firm.get_w_from_r(r[:p.T], p, 'TPI')
w[p.T:] = ss_vars['wss']
# initial guesses at fiscal vars
if p.budget_balance:
if np.abs(ss_vars['TR_ss']) < 1e-13:
TR_ss2 = 0.0 # sometimes SS is very small but not zero,
# even if taxes are zero, this get's rid of the
# approximation error, which affects the pct changes below
else:
TR_ss2 = ss_vars['TR_ss']
TR = np.ones(p.T + p.S) * TR_ss2
total_tax_revenue = TR - ss_vars['agg_pension_outlays']
G = np.zeros(p.T + p.S)
D = np.zeros(p.T + p.S)
D_d = np.zeros(p.T + p.S)
D_f = np.zeros(p.T + p.S)
else:
if p.baseline_spending:
TR = TRbaseline
G = Gbaseline
G[p.T:] = ss_vars['Gss']
else:
TR = p.alpha_T * Y
G = np.ones(p.T + p.S) * ss_vars['Gss']
D = np.ones(p.T + p.S) * ss_vars['Dss']
D_d = D * ss_vars['D_d_ss'] / ss_vars['Dss']
D_f = D * ss_vars['D_f_ss'] / ss_vars['Dss']
total_tax_revenue = np.ones(p.T + p.S) * ss_vars['total_tax_revenue']
# Initialize bequests
BQ0 = aggr.get_BQ(r_p[0], initial_b, None, p, 'SS', True)
if not p.use_zeta:
BQ = np.zeros((p.T + p.S, p.J))
for j in range(p.J):
BQ[:, j] = (list(np.linspace(BQ0[j], ss_vars['BQss'][j], p.T)) +
[ss_vars['BQss'][j]] * p.S)
BQ = np.array(BQ)
else:
BQ = (list(np.linspace(BQ0, ss_vars['BQss'], p.T)) +
[ss_vars['BQss']] * p.S)
BQ = np.array(BQ)
TPIiter = 0
TPIdist = 10
euler_errors = np.zeros((p.T, 2 * p.S, p.J))
TPIdist_vec = np.zeros(p.maxiter)
# TPI loop
while (TPIiter < p.maxiter) and (TPIdist >= p.mindist_TPI):
r_gov[:p.T] = fiscal.get_r_gov(r[:p.T], p)
if not p.budget_balance:
K[:p.T] = firm.get_K_from_Y(Y[:p.T], r[:p.T], p, 'TPI')
r_p[:p.T] = aggr.get_r_p(r[:p.T], r_gov[:p.T], K[:p.T], D[:p.T])
outer_loop_vars = (r, w, r_p, BQ, TR, theta)
euler_errors = np.zeros((p.T, 2 * p.S, p.J))
lazy_values = []
for j in range(p.J):
guesses = (guesses_b[:, :, j], guesses_n[:, :, j])
lazy_values.append(
delayed(inner_loop)(guesses, outer_loop_vars, initial_values,
ubi, j, ind, p))
if client:
futures = client.compute(lazy_values, num_workers=p.num_workers)
results = client.gather(futures)
else:
results = results = compute(*lazy_values,
scheduler=dask.multiprocessing.get,
num_workers=p.num_workers)
for j, result in enumerate(results):
euler_errors[:, :, j], b_mat[:, :, j], n_mat[:, :, j] = result
bmat_s = np.zeros((p.T, p.S, p.J))
bmat_s[0, 1:, :] = initial_b[:-1, :]
bmat_s[1:, 1:, :] = b_mat[:p.T - 1, :-1, :]
bmat_splus1 = np.zeros((p.T, p.S, p.J))
bmat_splus1[:, :, :] = b_mat[:p.T, :, :]
etr_params_4D = np.tile(
p.etr_params[:p.T, :, :].reshape(p.T, p.S, 1,
p.etr_params.shape[2]),
(1, 1, p.J, 1))
bqmat = household.get_bq(BQ, None, p, 'TPI')
trmat = household.get_tr(TR, None, p, 'TPI')
tax_mat = tax.net_taxes(r_p[:p.T], w[:p.T], bmat_s, n_mat[:p.T, :, :],
bqmat[:p.T, :, :], factor, trmat[:p.T, :, :],
ubi[:p.T, :, :], theta, 0, None, False, 'TPI',
p.e, etr_params_4D, p)
r_p_path = utils.to_timepath_shape(r_p)
wpath = utils.to_timepath_shape(w)
c_mat = household.get_cons(r_p_path[:p.T, :, :], wpath[:p.T, :, :],
bmat_s, bmat_splus1, n_mat[:p.T, :, :],
bqmat[:p.T, :, :], tax_mat, p.e,
p.tau_c[:p.T, :, :], p)
y_before_tax_mat = household.get_y(r_p_path[:p.T, :, :],
wpath[:p.T, :, :],
bmat_s[:p.T, :, :],
n_mat[:p.T, :, :], p)
(total_tax_rev, iit_payroll_tax_revenue, agg_pension_outlays,
UBI_outlays, bequest_tax_revenue, wealth_tax_revenue,
cons_tax_revenue, business_tax_revenue, payroll_tax_revenue,
iit_revenue) = aggr.revenue(r_p[:p.T], w[:p.T], bmat_s,
n_mat[:p.T, :, :], bqmat[:p.T, :, :],
c_mat[:p.T, :, :], Y[:p.T], L[:p.T],
K[:p.T], factor, ubi[:p.T, :, :], theta,
etr_params_4D, p, 'TPI')
total_tax_revenue[:p.T] = total_tax_rev
dg_fixed_values = (Y, total_tax_revenue, agg_pension_outlays,
UBI_outlays, TR, Gbaseline, D0_baseline)
(Dnew, G[:p.T], D_d[:p.T], D_f[:p.T], new_borrowing,
debt_service, new_borrowing_f) =\
fiscal.D_G_path(r_gov, dg_fixed_values, p)
L[:p.T] = aggr.get_L(n_mat[:p.T], p, 'TPI')
B[1:p.T] = aggr.get_B(bmat_splus1[:p.T], p, 'TPI', False)[:p.T - 1]
K_demand_open = firm.get_K(L[:p.T], p.world_int_rate[:p.T], p, 'TPI')
K[:p.T], K_d[:p.T], K_f[:p.T] = aggr.get_K_splits(
B[:p.T], K_demand_open, D_d[:p.T], p.zeta_K[:p.T])
Ynew = firm.get_Y(K[:p.T], L[:p.T], p, 'TPI')
rnew = r.copy()
rnew[:p.T] = firm.get_r(Ynew[:p.T], K[:p.T], p, 'TPI')
# For case where economy is small open econ
r[p.zeta_K == 1] = p.world_int_rate[p.zeta_K == 1]
r_gov_new = fiscal.get_r_gov(rnew, p)
r_p_new = aggr.get_r_p(rnew[:p.T], r_gov_new[:p.T], K[:p.T],
Dnew[:p.T])
# compute w
wnew = firm.get_w_from_r(rnew[:p.T], p, 'TPI')
b_mat_shift = np.append(np.reshape(initial_b, (1, p.S, p.J)),
b_mat[:p.T - 1, :, :],
axis=0)
BQnew = aggr.get_BQ(r_p_new[:p.T], b_mat_shift, None, p, 'TPI', False)
bqmat_new = household.get_bq(BQnew, None, p, 'TPI')
(total_tax_rev, iit_payroll_tax_revenue, agg_pension_outlays,
UBI_outlays, bequest_tax_revenue, wealth_tax_revenue,
cons_tax_revenue, business_tax_revenue, payroll_tax_revenue,
iit_revenue) = aggr.revenue(r_p_new[:p.T], wnew[:p.T], bmat_s,
n_mat[:p.T, :, :], bqmat_new[:p.T, :, :],
c_mat[:p.T, :, :], Ynew[:p.T], L[:p.T],
K[:p.T], factor, ubi[:p.T, :, :], theta,
etr_params_4D, p, 'TPI')
total_tax_revenue[:p.T] = total_tax_rev
TR_new = fiscal.get_TR(Ynew[:p.T], TR[:p.T], G[:p.T],
total_tax_revenue[:p.T],
agg_pension_outlays[:p.T], UBI_outlays[:p.T], p,
'TPI')
# update vars for next iteration
w[:p.T] = wnew[:p.T]
r[:p.T] = utils.convex_combo(rnew[:p.T], r[:p.T], p.nu)
BQ[:p.T] = utils.convex_combo(BQnew[:p.T], BQ[:p.T], p.nu)
D[:p.T] = Dnew[:p.T]
Y[:p.T] = utils.convex_combo(Ynew[:p.T], Y[:p.T], p.nu)
if not p.baseline_spending:
TR[:p.T] = utils.convex_combo(TR_new[:p.T], TR[:p.T], p.nu)
guesses_b = utils.convex_combo(b_mat, guesses_b, p.nu)
guesses_n = utils.convex_combo(n_mat, guesses_n, p.nu)
print('r diff: ', (rnew[:p.T] - r[:p.T]).max(),
(rnew[:p.T] - r[:p.T]).min())
print('BQ diff: ', (BQnew[:p.T] - BQ[:p.T]).max(),
(BQnew[:p.T] - BQ[:p.T]).min())
print('TR diff: ', (TR_new[:p.T] - TR[:p.T]).max(),
(TR_new[:p.T] - TR[:p.T]).min())
print('Y diff: ', (Ynew[:p.T] - Y[:p.T]).max(),
(Ynew[:p.T] - Y[:p.T]).min())
if not p.baseline_spending:
if TR.all() != 0:
TPIdist = np.array(
list(utils.pct_diff_func(rnew[:p.T], r[:p.T])) + list(
utils.pct_diff_func(BQnew[:p.T], BQ[:p.T]).flatten()) +
list(utils.pct_diff_func(TR_new[:p.T], TR[:p.T]))).max()
else:
TPIdist = np.array(
list(utils.pct_diff_func(rnew[:p.T], r[:p.T])) + list(
utils.pct_diff_func(BQnew[:p.T], BQ[:p.T]).flatten()) +
list(np.abs(TR[:p.T]))).max()
else:
TPIdist = np.array(
list(utils.pct_diff_func(rnew[:p.T], r[:p.T])) +
list(utils.pct_diff_func(BQnew[:p.T], BQ[:p.T]).flatten()) +
list(utils.pct_diff_func(Ynew[:p.T], Y[:p.T]))).max()
TPIdist_vec[TPIiter] = TPIdist
# After T=10, if cycling occurs, drop the value of nu
# wait til after T=10 or so, because sometimes there is a jump up
# in the first couple iterations
# if TPIiter > 10:
# if TPIdist_vec[TPIiter] - TPIdist_vec[TPIiter - 1] > 0:
# nu /= 2
# print 'New Value of nu:', nu
TPIiter += 1
print('Iteration:', TPIiter)
print('\tDistance:', TPIdist)
# Compute effective and marginal tax rates for all agents
mtrx_params_4D = np.tile(
p.mtrx_params[:p.T, :, :].reshape(p.T, p.S, 1, p.mtrx_params.shape[2]),
(1, 1, p.J, 1))
mtry_params_4D = np.tile(
p.mtry_params[:p.T, :, :].reshape(p.T, p.S, 1, p.mtry_params.shape[2]),
(1, 1, p.J, 1))
e_3D = np.tile(p.e.reshape(1, p.S, p.J), (p.T, 1, 1))
mtry_path = tax.MTR_income(r_p_path[:p.T], wpath[:p.T], bmat_s[:p.T, :, :],
n_mat[:p.T, :, :], factor, True, e_3D,
etr_params_4D, mtry_params_4D, p)
mtrx_path = tax.MTR_income(r_p_path[:p.T], wpath[:p.T], bmat_s[:p.T, :, :],
n_mat[:p.T, :, :], factor, False, e_3D,
etr_params_4D, mtrx_params_4D, p)
etr_path = tax.ETR_income(r_p_path[:p.T], wpath[:p.T], bmat_s[:p.T, :, :],
n_mat[:p.T, :, :], factor, e_3D, etr_params_4D,
p)
C = aggr.get_C(c_mat, p, 'TPI')
# Note that implicity in this computation is that immigrants'
# wealth is all in the form of private capital
I_d = aggr.get_I(bmat_splus1[:p.T], K_d[1:p.T + 1], K_d[:p.T], p, 'TPI')
I = aggr.get_I(bmat_splus1[:p.T], K[1:p.T + 1], K[:p.T], p, 'TPI')
# solve resource constraint
# foreign debt service costs
debt_service_f = fiscal.get_debt_service_f(r_p, D_f)
RC_error = aggr.resource_constraint(Y[:p.T - 1], C[:p.T - 1], G[:p.T - 1],
I_d[:p.T - 1], K_f[:p.T - 1],
new_borrowing_f[:p.T - 1],
debt_service_f[:p.T - 1],
r_p[:p.T - 1], p)
# Compute total investment (not just domestic)
I_total = aggr.get_I(None, K[1:p.T + 1], K[:p.T], p, 'total_tpi')
# Compute resource constraint error
rce_max = np.amax(np.abs(RC_error))
print('Max absolute value resource constraint error:', rce_max)
print('Checking time path for violations of constraints.')
for t in range(p.T):
household.constraint_checker_TPI(b_mat[t], n_mat[t], c_mat[t], t,
p.ltilde)
eul_savings = euler_errors[:, :p.S, :].max(1).max(1)
eul_laborleisure = euler_errors[:, p.S:, :].max(1).max(1)
print('Max Euler error, savings: ', eul_savings)
print('Max Euler error labor supply: ', eul_laborleisure)
'''
------------------------------------------------------------------------
Save variables/values so they can be used in other modules
------------------------------------------------------------------------
'''
output = {
'Y': Y[:p.T],
'B': B,
'K': K,
'K_f': K_f,
'K_d': K_d,
'L': L,
'C': C,
'I': I,
'I_total': I_total,
'I_d': I_d,
'BQ': BQ,
'total_tax_revenue': total_tax_revenue,
'business_tax_revenue': business_tax_revenue,
'iit_payroll_tax_revenue': iit_payroll_tax_revenue,
'iit_revenue': iit_revenue,
'payroll_tax_revenue': payroll_tax_revenue,
'TR': TR,
'agg_pension_outlays': agg_pension_outlays,
'bequest_tax_revenue': bequest_tax_revenue,
'wealth_tax_revenue': wealth_tax_revenue,
'cons_tax_revenue': cons_tax_revenue,
'G': G,
'D': D,
'D_f': D_f,
'D_d': D_d,
'r': r,
'r_gov': r_gov,
'r_p': r_p,
'w': w,
'bmat_splus1': bmat_splus1,
'bmat_s': bmat_s[:p.T, :, :],
'n_mat': n_mat[:p.T, :, :],
'c_path': c_mat,
'bq_path': bqmat,
'tr_path': trmat,
'y_before_tax_mat': y_before_tax_mat,
'tax_path': tax_mat,
'eul_savings': eul_savings,
'eul_laborleisure': eul_laborleisure,
'resource_constraint_error': RC_error,
'new_borrowing_f': new_borrowing_f,
'debt_service_f': debt_service_f,
'etr_path': etr_path,
'mtrx_path': mtrx_path,
'mtry_path': mtry_path,
'ubi_path': ubi,
'UBI_path': UBI
}
tpi_dir = os.path.join(p.output_base, "TPI")
utils.mkdirs(tpi_dir)
tpi_vars = os.path.join(tpi_dir, "TPI_vars.pkl")
with open(tpi_vars, "wb") as f:
pickle.dump(output, f)
if np.any(G) < 0:
print('Government spending is negative along transition path' +
' to satisfy budget')
if (((TPIiter >= p.maxiter) or (np.absolute(TPIdist) > p.mindist_TPI))
and ENFORCE_SOLUTION_CHECKS):
raise RuntimeError('Transition path equlibrium not found' +
' (TPIdist)')
if ((np.any(np.absolute(RC_error) >= p.mindist_TPI * 10))
and ENFORCE_SOLUTION_CHECKS):
raise RuntimeError('Transition path equlibrium not found ' +
'(RC_error)')
if ((np.any(np.absolute(eul_savings) >= p.mindist_TPI) or
(np.any(np.absolute(eul_laborleisure) > p.mindist_TPI)))
and ENFORCE_SOLUTION_CHECKS):
raise RuntimeError('Transition path equlibrium not found ' +
'(eulers)')
return output