This directory contains codes for generating the results in

       Unmeasured Investment and the Puzzling US Boom in the 1990s
       by Ellen McGrattan and Ed Prescott

Below we describe the files and instructions for generating
the figures and tables in the text and in the appendix.

FILES            BRIEF DESCRIPTION
-----            -----------------
*_params.m       Files created by *_steady.m
*_resid.m        Codes to compute residuals (called by *_simul.m)
*_simul.m        Codes to simulate model predictions (run *_wedges.m first)
*_steady.m       Codes to compute steady states
*_wedges.m       Codes to compute TFPs and (if needed) model wedges 
bca_*.m          Standard 1-sector prototype growth model 
intang_*.m       Growth model with intangible capital, nonneutral technology
nointang_*.m     Standard 2-sector growth model, no intangible capital
rintang_*.m      Growth model with intangible capital, neutral technology

INSTRUCTIONS FOR GENERATING RESULTS (Requires Matlab or Octave)
---------------------------------------------------------------

Paper 
-----

  Figures 1-2. 

       > bca_steady  
       > bca_wedges
       > bca_simul 
         Note: choose to set labor wedge and investment wedge at 1990 level

       Results are plotted in figure(1:2)

  Figures 3-6.  See README in ./DATA for further details about US Data

  Figures 7-14. 

       > intang_steady  
       > intang_wedges
       > intang_simul 
         Note: choose to set investment wedge at 1990 level

       Results are plotted in figure([10,17,1,2,9,8,14,15])


Appendix
--------
  Section 2.1.2. 

    Figures 1-5. 

         > bca_steady  
         > bca_wedges
         > bca_simul   (Set wedges to 1990 levels, ie., 1)
       
         Results are plotted in figure(1:5)

    Figure 6.

         > bca_simul   (Set TFP, investment wedge, tax rates to 1990 levels)
       
         Results are plotted in figure(1)

    Figure 7.
      
         > bca_simul   (Set TFP, labor wedge, tax rates to 1990 levels)
       
         Results are plotted in figure(1)

  Section 2.1.3.

    Figure 8. NIPA ratio of implicit price deflator of PCE to GPDI, 1990=1
   
    Figure 9-10.  Replace xwedge in bca_wedges with:

         > xwedge  = [1.0000 1.0208 1.0543 1.0657 1.0738 1.0847 1.1125 ...
                      1.1350 1.1583 1.1781 1.1950 1.2080 1.2178 1.2232]';

         and then run the bca codes as before.  Results are plotted 
         in figure(1:2).


  Section 2.1.5.

    Figures 11-17. 

         > nointang_steady  
         > nointang_wedges
         > nointang_simul   (Set wedges to 1990 levels, ie., 1)
       
         Results are plotted in figure(1:7)

    Figures 18. 
      
         > nointang_simul (Set TFP, investment wedge, tax rates to 1990 levels)

         Results are plotted in figure(1)

    Figures 19. 
      
         > nointang_simul (Set TFP, labor wedge, tax rates to 1990 levels)

         Results are plotted in figure(1)

  Section 2.2.2.

    Figure 20. 
      
         > rintang_steady  
         > rintang_wedges
         > rintang_simul   (Set wedges to 1990 levels, ie., 1)
       
         Results are plotted in figure(1)

    Figure 21. 
      
         > rintang_simul  (Set TFP, investment wedge, tax rates to 1990 levels)

         Results are plotted in figure(1)

    Figure 22. 
      
         > rintang_simul  (Set TFP, labor wedge, tax rates to 1990 levels)

         Results are plotted in figure(1)

  Section 2.3.3.

    Figures 23,25-32. 
      
         > intang_steady  
         > intang_wedges
         > intang_simul   (Set wedges to 1990 levels, ie., 1)
       
         Results are plotted in figures(1:9)

    Figure 24.  Added graph for one of the referees showing the decomposition
         of hours.  After running intang_simul as above, plot the series:
         h1t, h2t, and hnt.

  Section 2.3.3.
    
    Figures 33-35. Replace observables.dat with observsoft.dat and rerun
                   codes that generated Figures 23, 25, and 26.

  
  Sections 3 and 4: Figures 36-42 are based on results from the literature

  Section 5.1

    Figure 43-44. With phi1 and deltI as specified in graphs
      
         > intang_steady_alt   
         > intang_wedges
         > intang_simul   (Set wedges to 1990 levels, ie., 1)

         Results are plotted in figure([9,17])

    Figure 45-46. Set deltI=0 and phi's, theta's as specified in graphs
      
         > intang_steady_alt2 
         > intang_wedges
         > intang_simul   (Set wedges to 1990 levels, ie., 1)

         Results are plotted in figure(1:2)

    Figure 47-48. Use data in rates.dat
      
         > intang_steady  
         > intang_wedges
         > intang_simul   (Set wedges to 1990 levels, ie., 1)

         Results are plotted in figure(1:2)

  Section 5.2: See codes in ../MODELS/stoch directory

  Section 6: See data in ../DATA