# Example two --- Deterministic growth model with habit formation

states:
z, k
end

jumps:
c, muc
end

shocks:
end

parameters:
β = 0.99
σ = 1.1
γ = 0.8
δ = 0.025
α = 0.30
ρ = 0.8
end

equations:
exp(k(+1)) = (1.0 - δ)*exp(k) + exp(z)*exp(k)^α - exp(c)
(exp(c) - γ*exp(c(-1)))^(-σ) = β*muc(+1)*(1.0 - δ + α*exp(z(+1))*exp(k(+1))^(α - 1.0))
muc = (exp(c) - γ*exp(c(-1)))^(-σ)
z(+1) = ρ*z
end
