rm(list=ls())

#parameters
alpha <- 0.3
s <- 0.2
u<-0.05
delta <- 0.05
n<-0.015
gamma <- 0.3
psi <- 0.1
mu <- 0.01

#simulation length
T <- 500

A <- rep(0,T)
h <- rep(0,T)
ktilde <- rep(0,T)
y <- rep(0,T)
g_h <- rep(0,T)
dot_h <- rep(0,T)
dot_ktilde <- rep(0,T)
g_y <- rep(0,T)


#initial conditions
A[1] <- 10
h[1] <- 1


#implied g to be consistent with balanced growth
g <- mu*exp(psi*u)*(A[1]/h[1])^gamma
g_h_s <- g

ktilde[1] <- (s/(delta+g_h_s+n))^(1/(1-alpha))


#increase in u
u <- 0.3