period_length = 0.25;

P = 1 - exp(-.04*period_length); % disaster probability

B = -log(1 - .32); % disaster size

meanB = B;

G = 0.025*period_length; % drift of log output

RHO = 0.04*period_length; % time preference rate

NU = 0.02*period_length; % replacement rate

MU = 0.05; % popoulation share of agent 1

ALPHA = 1/3; % capital share in output

TAU = 0; % bond duration - short-term bonds

GAMMA1 = 1.000001; % start with unit risk aversion
GAMMA2 = GAMMA1;