TABLE 1. Calibration of households and firms
| Home | REA | US | RW |
|---|
| Households | | | | |
|---|
| Discount factor (β) | 0.9975 | 0.9975 | 0.9975 | 0.9975 |
|---|
| Intertemporal elasticity of substitution (σ) | 1.00 | 1.00 | 1.00 | 1.00 |
|---|
| Habit persistence (κ) | 0.6 | 0.6 | 0.6 | 0.6 |
|---|
| Capital depreciation rate (δK) | 0.025 | 0.025 | 0.025 | 0.025 |
|---|
| Share of non-Ricardian households (ω) | 0.25 | 0.25 | 0.25 | 0.25 |
|---|
| Interm.-good firms (trad. and non-trad. sectors) | | | | |
|---|
| Subst. btw. labour and capital | 1.00 | 1.00 | 1.00 | 1.00 |
|---|
| Bias towards capital - tradables (αT) | 0.30 | 0.30 | 0.30 | 0.30 |
|---|
| Bias towards capital - non-tradables (αN) | 0.30 | 0.30 | 0.30 | 0.30 |
|---|
| Production - public capital (αG) | 0.05 | 0.05 | 0.05 | 0.05 |
|---|
| Production - labour services (αH) | 0.9 | 0.9 | 0.9 | 0.9 |
|---|
| Final consumption-good firms | | | | |
|---|
| Subst. btw. domestic and imported trad. goods (μTC) | 2.50 | 2.50 | 2.50 | 2.50 |
|---|
| Bias towards domestic tradable goods (νTC) | 0.30 | 0.47 | 0.63 | 0.71 |
|---|
| Subst. btw. tradables and non-tradables (μC) | 0.50 | 0.50 | 0.50 | 0.50 |
|---|
| Bias towards tradable goods (vC) | 0.80 | 0.45 | 0.35 | 0.35 |
|---|
| Bilateral bias towards imported goods, Home (νMC) | - | 0.24 | 0.12 | 0.64 |
|---|
| Bilateral bias towards imported goods, REA (νMC) | 0.07 | - | 0.10 | 0.83 |
|---|
| Bilateral bias towards imported goods, US (νMC) | 0.04 | 0.12 | - | 0.84 |
|---|
| Bilateral bias towards imported goods, RW (νMC) | 0.04 | 0.58 | 0.38 | - |
|---|
| Substitution btw. consumption good imports (μIMC) | 2.50 | 2.50 | 2.50 | 2.50 |
|---|
| Final investment-good firms | | | | |
|---|
| Subst. btw. domestic and imported trad. goods (μTI) | 2.50 | 2.50 | 2.50 | 2.50 |
|---|
| Bias towards domestic tradable goods (νTI) | 0.36 | 0.65 | 0.79 | 0.76 |
|---|
| Substitution btw. tradables and non-tradables (μI) | 0.50 | 0.50 | 0.50 | 0.50 |
|---|
| Bias towards tradable goods (νI) | 0.80 | 0.75 | 0.75 | 0.75 |
|---|
| Bilateral bias towards imported goods, Home (νMI) | - | 0.17 | 0.41 | 0.42 |
|---|
| Bilateral bias towards imported goods, REA (νMI) | 0.03 | - | 0.23 | 0.74 |
|---|
| Bilateral bias towards imported goods, US (νMI) | 0.05 | 0.15 | - | 0.80 |
|---|
| Bilateral bias towards imported goods, RW (νMI) | 0.01 | 0.50 | 0.49 | - |
|---|
| Substitution btw. investment good imports (μIMI) | 2.50 | 2.50 | 2.50 | 2.50 |
|---|
| Reexported goods | | | | |
|---|
| Subst. btw. dom. tradables and imported exports (μX) | 1.50 | 1.50 | 1.50 | 1.50 |
|---|
| Bias towards domestic tradable goods in exports (νX) | 0.55 | 0.66 | 0.82 | 0.63 |
|---|
| Bilateral bias towards imported goods, Home (νMX) | - | 0.23 | 0.20 | 0.57 |
|---|
| Bilateral bias towards imported goods, REA (νMX) | 0.07 | - | 0.13 | 0.80 |
|---|
| Bilateral bias towards imported goods, US (νMX) | 0.05 | 0.13 | - | 0.82 |
|---|
| Bilateral bias towards imported goods, RW (νMX) | 0.03 | 0.56 | 0.41 | - |
|---|
| Substitution btw. goods in import bundle (μMX) | 2.50 | 2.50 | 2.50 | 2.50 |
|---|