Simulating MPC

[atishkumar258]

I am working on simulating MPC for India using Econpizza. I tried using the get_distributions() function to get the disaggregated variables after applying a shock to wages(e_w) through find_path(). However, I am unsure how to recover MPCs after applying the shock. Please let me know if there is any other way of simulating MPCs using Econpizza. Any help would be greatly appreciated.

[gboehl]

Hi Atish,
Thanks for getting in touch. I have not calculated MPCs for my research, so there is no ready code that I can give you.

In general, get_distributions() will give you (sequences) of everything you define during the decisions stage and state as an output (specified in the key outputs). Probably the best way would thus be to check and adapt how others calculated MPCs (e.g. Kaplan, Moll, Violante) and then add the respective code to egm_step() (or whatever your iteration function is).

You are welcome to post the results here as a reference for others.
Best,
Gregor

[atishkumar258]

Thanks a lot, will try to work it out and share the results.