/* fixed point computational exercise */

closeall;
output file = fp_1.out reset;

/* functional equation for simple infinite horizon unemployed search model in which the accepted
   job is kept forever */

/* parameters  */ 
   b = 1;
   rho = .05;
   lambda = .3;

/* assume the wage offer distribution is negative exponential with parameter .2 - so that the mean
   wage offer is 5 */

gwstar = 0;
_intord = 40;

proc ifp(x);
retp( (x - gwstar) .* ( .2 * exp( - .2 * x)) );
endp;

proc t_oper(wstar);
gwstar = wstar;
retp(  b + lambda/rho * intquad1( &ifp, (100 | wstar)) );
endp;

/*
/* plot t_oper */
library pgraph;
graphset;
xvec = seqa(.1,.1,300);
xy(xvec,(t_oper(xvec) ~ xvec));
*/

/* successive approximation to get fixed point */

x_old = 1;
diff = 10;
do until diff lt .000001;
  gwstar = x_old;
  x_new = .9 * t_oper(x_old) + .1 *x_old;
  diff = abs(x_new - x_old);
  print x_new;
  x_old = x_new;
endo;

print "wstar" x_old;



end;