|Parameter|Value|Defnition<br>|Parameter|Value|Defnition|
|---|---|---|---|---|---|
|_expshare_|0.19|Exports to GDP|_ω_|0.40|Measure of optimizers in the economy|
|_impshare_|0.35|Imports to GDP|_χ_|0.44|Substitution elasticity b/w traded/nontraded goods|
|_g_<sup>_C_</sup><br>_share_|0.16|Government consumption to GDP|_η_|1|Elasticity of portfolio adjustment costs|
|_g_<sup>_I_</sup><br>_share_|0.086|Government investment to GDP|_τ_<sup>_O_</sup>|-|Royalty tax rate on natural resources|
|_ishare_|0.137|Private investment to GDP|_f_|0.50|User fees of public infrastructure|
|_yO,share_|0.40|Natural resources to GDP|_τ_<sup>_L_</sup>|0.05|Labor income tax rate|
|_gT,share_|0.40|Share of tradables in government purchase|_τ_<sup>_C_</sup>|0.10|Consumption tax rate|
|_cT,share_|0.60|Share of tradables in private consumption|_τ_<sup>_K_</sup>|0.20|Tax rate on the return on capital|
|_RFshare_|0|Stabilization fund to GDP|_ffloor_|0|Lower bound for the stabilization fund|
|_bshare_|0.268|Government domestic debt to GDP|κ|1|Adjustment share by external commercial debt|
|_b_<sup>_∗_</sup><br>_share_|0|Private foreign debt to GDP|_λ_1|1|Adjustment share by consumption tax|
|_dshare_|0.114|Concessional debt to GDP|_ζ_1|0.5|Adjustment speed of consumption tax to target|
|_dc,share_|0.063|Government external commercial debt/GDP|_ζ_1|0.001|Adjustment speed of consumption tax to target|
|_grshare_|0.01|Grants to GDP|_τ_<sup>_C_</sup><br>_ceiling_|+_∞_|Ceiling on consumption tax|
|(_R −_1)|0.023|Domestic net real interest rate|_ν_|0.6|Home bias of government purchases|
|�<br>_R_<sup>_RF _</sup>_−_1<br>�|0.027|Foreign net real interest rate on savings|_νg_|0.4|Home bias for additional spending|
|(_Rd −_1)|0.01|Net real interest rate on concessional debt|_αG_|0.12|Output elasticity to public capital|
|�<br>_R_<sup>_f _</sup>_−_1<br>�|0.013|Net real risk-free rate|_δG_|0.10|Depreciation rate of public capital|
|�<br>_Rdc,_0 _−_1<br>�|0.07|Net real interest rate on external commercial debt| ̄_ε_|0.50|Steady-state efciency of public investment|
|_ηdc_|0|Elasticity of sovereign risk|_k_1|-|Speed of scaling up plan|
|_αN_|0.45|Labor income share in nontraded sector|_k_2|-|Degree of frontloading|
|_αT_|0.60|Labor income share in traded sector|_ρδ_|0.80|Persistence of depreciation rate of public capital|
|_δN_|0.10|Depreciation rate of _kN,t_|_φ_|1|Severity of public capital depreciation|
|_δT_|0.10|Depreciation rate of _kT,t_|_ςε_|50|Severity of absorptive capacity constraints|
|_ρyT_|0.10|Learning by doing in traded sector| ̄_γ_<sup>_GI_</sup>|0.60|Thresholds of absorptive capacity constraints|
|_ρzT_|0.10|Persistence in TFP in traded sector|_ψH, ψE_|0.60|Concavity parameters in human capital investment|
|_κN_|25|Investment adjustment cost, nontraded sector|_γH, γE_|0.19|Efciency of human capital investment|
|_κT_|25|Investment adjustment cost, traded sector|_jE_|5|Time to build lag for education stock|
|_ψ_|10|Inverse of Frisch labor elasticity|_jH_|1|Time to build lag for health status|
|_σ_|2.94|Inverse of intertemporal elasticity of substitution|_εE_|0.1|Output elasticity to education investment|
|_ρ_|1|Intratemporal substitution elasticity of labor|_εH_|0.03|Output elasticity to health investment|

Table 1: Baseline calibration real return of the Norwegian Government Pension Fund from 1997 to 2011 (Gros and Mayer, 2012), the annual real return on international financial assets in the resource fund ( _R_<sup>_RF_</sup> _−_ 1) is set at 2 _._ 7 percent.

- _Private production_ . Consistent with the evidence on Sub-Saharan Africa (SSA) surveyed in Buffie _et al._ (2012), the labor income shares in the nontraded and traded good sectors correspond to _αN_ = 0 _._ 45 and _αT_ = 0 _._ 60. In both sectors private capital depreciates at an annual rate of 10 percent ( _δN_ = _δT_ = 0 _._ 10). Following Berg _et al._

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