Macroeconomic ABM with Banking Instability and Macroprudential Rules
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Rubén Osuna (Author)
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crisis
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cycles
Tagged by Rubén Osuna about 7 years ago
macroeconomic
Tagged by Rubén Osuna about 7 years ago
Parent of 1 model: Version 2
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; Macro Agent Base Model (MABM) ; code written by Rubén Osuna, from the model of Assenza, Gatti, Grazzini et al. (2015) macro ABM (as coded by Elder Silva) extensions [ matrix r stats ] ; calling the R extension and the matrix extension globals [ taylor-interest-rate ; the interest rate. Conservative type: only inflation considered. Dual mandate: inflation and output gap. Three mandate: inflation, output gap and credit eta1 ; undifferentiated interest rate applied to loans of firms with the retail banks eta2 ; interest rate applied to loans of retail banks with the Central Bank eta3 ; interest rate applied to deposits of firms in the accounts of the retail banks eta4 ; interest rate applied to deposits of retail banks in the accounts of the Central Bank GDP ; sum of consumption, total-investment and public expenditures GDP_1 ; GDP of the last period (tick) P_GDP ; potential GDP Growth-Rate ; growth rate of the GDP Recession-lenght ; how many periods the GDP is decreasing Unemployment-Rate ; rate of unemployment Total-Consumption ; sum of goods sold by the consumptions firms Total-Investment ; sum of total capital sold by the capital production firms Goods-Price-Level ; sum (price * qt) / Qt sold Goods-Price-Level_1 ; the same, for the previous period Capital-Price-Level ; sum (price * qt) / Qt sold Capital-Price-Level_1 ; the same, for the previous period Total-Loans-Firms ; sum of loans of retail banks with firms of any kind Total-Loans-C-Firms ; sum of loans with the C-Firms Total-Loans-K-Firms ; sum of loans with the K-Firms Total-Central-Bank-Loans ; sum of loans of the retail banks with the Central Bank Total-Loans ; sum of loans in this economy (adding up the previous cathegories) Total-Loans_1 ; sum of loans in this economy for the previous period Total-Client-Loans ; this variable should be equal to Total-Loans, but calculated from banks' variables Total-Deposits ; sum of all deposits of the retail banks Total-Clients-Accounts ; this variable should be equal to Total-Deposits, but calculated from banks' variables Total-Deposits_1 ; sum of all deposits of the retail banks, previous period Total-Reserves ; sum of all reserves of the retail banks Total-Deposits-Workers ; sum of deposit at the bank of the households Total-Deposits-Capitalists ; sum of deposit at the bank of the capitalists Total-Deposits-C-Firms ; sum of deposit at the bank of the C-Firms Total-Deposits-K-Firms ; sum of deposit at the bank of the K-Firms Total-Interest-Payments ; sum of all interest payments from loaners to retail banks Total-Installment-Payments ; sum of all installment payments from loaners to retail banks C-Firms ; group of firms producing consumption goods K-Firms ; group of firms producing capital goods Workers ; group of households that offer work time Capitalists ; group of households that are owners of firms and banks and do not work for others Employed ; group of workers with an employment Unemployed ; group of workers without an employment C-Broke ; number of consumption firms that went broken last period K-Broke ; number of capital production firms that went broken last period B-Broke ; number of banks that went broken last period Matrix-C-Firms-Bankruptcy ; input with information that will be used in calculation into R (eq 23) Matrix-K-Firms-Bankruptcy ; input with information that will be used in calculation into R (eq 23) Matrix-Basel-Buffer ; input with information that will be used in calculation into R (eq 23) cpi ; consumer price index of this period cpi_1 ; consumer price index of the previous period inflation ; inflation of this period inflation_1 ; inflation of the previous period Wage-on-GDP ; total salaries as a percentage of the GDP, then wage = Wage-on-GDP * GDP / Number-of-Employees is the wage that keeps that proportion constant Wage-on-GDP_1 ; total salaries as a percentage of the GDP, then wage = Wage-on-GDP * GDP / Number-of-Employees is the wage that keeps that proportion constant Credit-on-GDP ; this is the basic ratio used in the Counter-Cyclical-Capital-Buffer defined in Basel III rules Credit-on-GDP_1 ; the same from the previous period Credit-on-GDP-Gap ; difference between current Credit-on-GDP and the long run trend State-budget ; how much money the Government owns at this stick State-budget_1 ; how much money the Government had the previous period. It is related to the cycle Leverage-Banks ; mean leverage of the Banks, the Central Bank has their numbers Central-Bank-Own-Capital ; the own capital of the central bank, a liability in its balance Account-of-State-at-Central-Bank ; Account of the State at the Central Bank Monetary-Base ; currency plus total reserves or public debt plus credits o the central bank to retail bank less Account-of-State-at-Central-Bank and the capital of the CB Currency ; bills and coins, the monetary base less total reserves Money-Supply ; menetary base multiplied by the money multiplier, which is the inverse of RR, the reserve ratio Capital-Buffer ; a % of the new loans acting like reserves QEasing? ; it is automatically set true if three periods of recession are observed PublicDebt ; public debt titles sold to the central bank PublicDebt_1 ; public debt titles sold to the central bank the previous period Wage ; uniform wage paid to the workers by C-Firms and K-Firms Wage_1 ; wage of the previous period Helped-Households ; how many households are being helped Beta_1-C-Firms ; parameter utilized by the banks to calculate the interest rate for the firms (eq 26) Beta_2-C-Firms ; parameter utilized by the banks to calculate the interest rate for the firms (eq 26) Beta_1-K-Firms ; parameter utilized by the banks to calculate the interest rate for the firms (eq 26) Beta_2-K-Firms ; parameter utilized by the banks to calculate the interest rate for the firms (eq 26) Mjc ; parameter utilized in the process "SubF-Call-Matrix-formation", related to C-Firms Mjk ; parameter utilized in the process "SubF-Call-Matrix-formation", related to K-Firms Mjb ; parameter utilized in the process related to the calculation of the Capital Buffer set in Basel III rules Current-Number-of-C-Firms ; current number of C-Firms, after losses and entries Current-Number-of-K-Firms ; current number of K-Firms, after losses and entries Current-Number-of-Workers ; current number of Workers, after losses and entries ] breed [ Banks Bank ] ; agent class breed [ Households Household ] ; agent class breed [ Firms Firm ] ; agent class directed-link-breed [ Hireds Hired ] ; link used to link firms to the worker directed-link-breed [ Owners Owner ] ; link used to link firms and banks to their owner/capitalist directed-link-breed [ Bankers Banker ] ; link used for connecting the clients with its bank Banks-own [ Clients-Accounts-C-Firms ; the total accounts (deposits) of C-Firms in this bank Clients-Accounts-K-Firms ; the total accounts (deposits) of K-Firms in this bank Clients-Accounts-Firms ; the sum of the former two variables Clients-Accounts-Workers ; the total accounts (deposits) of Workers in this bank Clients-Accounts-Capitalists ; the total accounts (deposits) of Capitalists in this bank Clients-Accounts-Households ; the total accounts (deposits) of Households (Workers and Capitalists) in this bank Clients-Accounts-at-the-Bank_1 ; the sum of all previous variables (sum of Firms and Households accounts), previous period Clients-Accounts-at-the-Bank ; the sum of all previous variables (sum of Firms and Households accounts) Clients-Loans-C-Firms ; the total loans of C-Firms in this bank Clients-Loans-K-Firms ; the total loans of K-Firms in this bank Clients-Loans-with-the-Bank_1 ; the total loans Firms in this bank, previous period Clients-Loans-with-the-Bank ; the total loans Firms in this bank Available-Credit-Basel2 ; maximum available credit under Basel II rules Available-Credit-Basel31 ; maximum available credit under Basel III rules, Global Capital Framework Available-Credit-Basel32 ; maximum available credit under Basel III rules, Global Liquidity Requirement Available-Credit-Basel ; maximum available credit under Basel rule Number-of-Firm-Clients Number-of-Household-Clients Number-of-Clients Own-Reserves ; the reserves of retail banks are deposited in the Central Bank, and they are rewarded with the eta4 Own-Bank-Capital ; bank own capital Need-Cash ; need of money after production, because the bank has losses and it does not have enough assets for paying it Bank-Equity ; Equity is the net worth, the difference between assets and liabilities Central-Bank-Loans ; loans from the Central Bank to the Retail Banks Profit ; sum of interest received less the bank losses with their loans PBT ; profits before taxes I-Received ; total interest payments of Firms to the Banks D-Received ; total installment pays of Firms to the Banks Assets ; total assets of retail banks Liabilities ; total liabilities of retail banks Overdraft ; losses of the bank so large than it cannot compensate it with own capital Shares ; the own-bank-capital divided by the total number of capitalists in this economy PBT ; profits before taxes ] Households-own [ Worker? ; property of the household, true if it is a worker, false if it is a capitalist Employed? ; property of the household, true if it is employed, false if it is unemployed Bankrupt? ; property of the household, true if the capitalist is broken and become a worker Human-Wealth ; variable used in determining how much of the entire wealth will be used for consumption Current-Income ; the salary if it is a worker, the profit if it is a capitalist Bank-Account-Household ; the total of wealth of the households held with the bank Desired-Consumption ; theorical value the household want to consume this period Consumption ; real value the household did consumption C-Firm-List ; list with the firms the household visited last period My-Nearest-Bank ; the nearest bank to the household ] Firms-own [ C-Firm? ; property of the firms, yes if it is a consumption production firm, not if is a capital production firm Owner? ; any firm may lose its owner, so this parameter sets the existence of not of an owner at a particular moment Price ; last price practiced by the firm Demand ; last quantity demanded Production ; actual production of the firm Stock ; amount available for sales (inventories) Delta ; parameter used to calculate new price Number-of-Employees ; actual number of employees of this firm Need-of-Employees ; ideal number of employees for this firm Vacancy ; number of opened places at this firm for new workers Revenue ; sum of quantity sold times the price Sales ; sum of quantity sold last period Profit ; revenue less the expenditures, considering taxes PBT ; profits before taxes Dividend ; part of the profit given to the owner, from firms and banks Overdraft ; difference between losses and firm's own resources Need-Cash ; need of money before production starts Bank-Account-Firm ; money available at the bank owned by the firms Leverage ; debts of the firm divided by their assets, including the debt, ranging between 0 and 1 (0 is zero debt, and 1, all assets are debt) Assets ; sum deposit at bank and stock available for sales Liabilities ; total liabilities of firms Equity-C-Firms ; assets minus liabilities, or net worth Equity-K-Firms ; assets minus liabilities, or net worth eta0 ; taylor-made interest rata calculated for every firm Current-Retail-Loans ; loans with the retail banks Cases-of-Bankruptcy ; the total number of bankruptcies by this firm Probability-of-Bankruptcy ; the probability of dying of the firm Available-Credit-Assenza ; maximum available credit under internal risk calculations of the bank Interest-Pay ; sum of interest rate payed last period Installment-Pay ; sum of the installment payed last period T-expected ; the expected life span for this firm Capital ; property of the C-firms, indicate the capital available to be used at the production process Desired-Investment ; property of the C-Firms, ideal investment needed K-Firm-List ; property of the C-Firms, list with the K-Firms the C-Firms visited last period trying to buy capital goods Investment ; property of the C-Firms, capital goods bough last period Investment-Memory ; property of the C-firms, parameter utilized to calculate te Desired-Investment Util-Capacity ; property of the C-Firms, indicates how much of the Capital had been used Stock_t-1 ; Stock available in t-1 My-Nearest-Bank ; the nearest bank to the firm ] ; TO SETUP to Setup clear-all ;Setup-Globals Short-Setup-Globals if Do_We_Have_Banks? [ Setup-Banks ] ; call the setup for banks if Do_We_Have_C-Firms? [ Setup-C-Firms ] ; call the setup for C-Firms if Do_We_Have_K-Firms? [ Setup-K-Firms ] ; call the setup for K-Firms if Do_We_Have_Workers? [ Setup-Workers ] ; call the setup for workers if Do_We_Have_Capitalists? [ Setup-Capitalists ] ; call the setup for Capitalists reset-ticks ; netlogo need this end ; The setup-globals is not being called. but if it is included into the setup it is not working, because some variable is not a defined global. to Short-Setup-Globals set C-Firms Firms with [ C-Firm? ] ; building the group with all C-Firms set K-Firms Firms with [ not C-Firm? ] ; building the group with all K-firms set Capitalists Households with [ not Worker? ] ; building the group with all Capitalist set Workers Households with [ Worker? ] ; building the group with all workers if not Random-Seed? [ random-seed 12345 ] ; random seed may or not be used end to Setup-Globals ; call the setup for globals set taylor-interest-rate natural-interest-rate ; the interest rate set by the central bank set GDP 0 ; initial GDP set GDP_1 0 ; GDP of the previous period set Recession-lenght 0 ; number of periods with GDP falls set Unemployment-rate 0 ; initial Unemployment rate set Total-Consumption 0 ; initial value of consumption set Total-Investment 0 ; initial value of total investment set Goods-Price-Level 1 ; initial goods price level, necessary minimum for taking logarithms later set Capital-Price-Level 1 ; initial capital goods price level, necessary minimum for taking logarithms later set Goods-Price-Level_1 0.5 ; initial goods price level of the previous period, necessary minimum for taking logarithms later set Capital-Price-Level_1 0.5 ; initial capital goods price level of the previous period, necessary minimum for taking logarithms later set Wage Minimum-Wage ; initial value for the wage set Wage_1 0 ; initial value for the wage of the previous period set cpi 0 ; consumer price index of this period set cpi_1 0 ; consumer price index of the previous period set inflation 0 ; inflation of this period set inflation_1 0 ; inflation of the previous period set Wage-on-GDP 0 ; total salaries as a percentage of the GDP, then wage = Wage-on-GDP * GDP / Number-of-Employees is the wage that keeps that proportion constant set Wage-on-GDP_1 0 ; total salaries as a percentage of the GDP, then wage = Wage-on-GDP * GDP / Number-of-Employees is the wage that keeps that proportion constant set Credit-on-GDP 0 ; this is the basic ratio used in the Counter-Cyclical-Capital-Buffer defined in Basel III rules set Credit-on-GDP_1 0 ; this is the basic ratio used in the Counter-Cyclical-Capital-Buffer defined in Basel III rules set Total-Loans-Firms 0 ; initial value for total loans of retail banks and firms set Total-Loans-C-Firms 0 ; initial value for C-loans set Total-Loans-K-Firms 0 ; initial value for K-loans set Total-Central-Bank-Loans 0 ; initial value for the total loans of retail banks and central bank set Total-Loans 0 ; initial value for the total loans in this economy set Total-Loans_1 0 ; sum of loans in this economy for the previous period set Total-Deposits-Workers 0 ; sum of deposit at the bank of the households set Total-Deposits-Capitalists 0 ; sum of deposit at the bank of the capitalists set Total-Deposits-C-Firms 0 ; sum of deposit at the bank of the C-Firms set Total-Deposits-K-Firms 0 ; sum of deposit at the bank of the K-Firms set Total-Deposits 0 ; sum of all deposits of retail banks set Total-Deposits_1 0 ; sum of all deposits of retail banks, previous period set Total-Reserves 0 ; the reserves of retail banks are deposited in the Central Bank, and they are rewarded with the eta4 set Total-Interest-Payments 0 ; total interest payments of firms to reatail banks for loans received set Total-Installment-Payments 0 ; total installment payments firms to reatail banks for loans received ; the Available-Credit-Basel is a bank propertie, not a global. Need to be relocated to bank setup ;set Available-Credit-Basel 0 ; this is the credit limit to retail banks from Basel macroprudential rules ;set Available-Credit-Basel2 0 ; maximum available credit under Basel II rules ;set Available-Credit-Basel31 0 ; maximum available credit under Basel III rules, Global Capital Framework ;set Available-Credit-Basel32 0 ; maximum available credit under Basel III rules, Global Liquidity Requirement ; ^^^^^^^^ to be relocated set State-Budget 0 ; initial value for State-Budget set C-Firms Firms with [ C-Firm? ] ; building the group with all C-Firms set K-Firms Firms with [ not C-Firm? ] ; building the group with all K-firms set Capitalists Households with [ not Worker? ] ; building the group with all Capitalist set Workers Households with [ Worker? ] ; building the group with all workers set Employed Workers with [ Employed? ] ; building the group with all employed workers set Unemployed Workers with [ not Employed? ] ; building the group with all unemployed workers set Helped-Households 0 ; number of households helped by the State set Central-Bank-Own-Capital sum [Initial-equity-of-the-bank ] of Banks ; the own capital of the central bank, a liability in its balance set Account-of-State-at-Central-Bank 0 ; Account of the State at the Central Bank set Matrix-C-Firms-Bankruptcy matrix:make-constant 2 Time-Window1 0 ; building the initial matrix which will be used by R-Netlogo later, it is a constant matrix of zeroes with 2 rows and "T-W1" columns set Matrix-K-Firms-Bankruptcy matrix:make-constant 2 Time-Window1 0 ; building the initial matrix which will be used by R-Netlogo later, it is a constant matrix of zeroes with 2 rows and "T-W1" columns set Matrix-Basel-Buffer matrix:make-constant 2 Time-Window2 0 ; building the initial matrix which will be used by R-Netlogo later, it is a constant matrix of zeroes with 2 rows and "T-W2" columns set Mjc 0 ; helper with the matrix above set Mjk 0 ; helper with the matrix above set Mjb 0 ; helper with the matrix above set Probability-of-Bankruptcy 0 ; probability of a firm of dying, explained by the leverage of that firm set PublicDebt 0 ; public debt titles sold to the central bank set PublicDebt_1 0 ; public debt titles sold to the central bank the previous period if not Random-Seed? [ random-seed 12345 ] ; random seed may or not be used end to Setup-Banks create-Banks Number-of-Banks [ ; create n banks, determined in a global variable setxy random-xcor random-ycor ; place them randomly move-to one-of patches with [not any? Firms-here] ; if a C-Firm or K-Firm is at the same patch, move the Bank to another empty patch in the setup process set shape "house" ; just for fun, not necessary for the model, used only for display in HUD netlogo set size 2 ; just for fun, not necessary for the model, used only for display in HUD netlogo set color turquoise ; just for fun, not necessary for the model, used only for display in HUD netlogo set Own-Bank-Capital Initial-equity-of-the-bank ; explicit set Bank-Equity Own-Bank-Capital ; this is the initial equity of the bank set Clients-Accounts-C-Firms 0 ; the total accounts (deposits) of C-Firms in this bank set Clients-Accounts-K-Firms 0 ; the total accounts (deposits) of K-Firms in this bank set Clients-Accounts-Firms 0 ; the sum of the former two variables set Clients-Accounts-Workers 0 ; the total accounts (deposits) of Workers in this bank set Clients-Accounts-Capitalists 0 ; the total accounts (deposits) of Capitalists in this bank set Clients-Accounts-Households 0 ; the total accounts (deposits) of Households (Workers and Capitalists) in this bank set Clients-Accounts-at-the-Bank_1 0 ; the sum of all previous variables (sum of Firms and Households accounts), previous period set Clients-Accounts-at-the-Bank 0 ; the sum of all previous variables (sum of Firms and Households accounts) set Clients-Loans-C-Firms 0 ; the total loans of C-Firms in this bank set Clients-Loans-K-Firms 0 ; the total loans of K-Firms in this bank set Clients-Loans-with-the-Bank_1 0 ; the total loans Firms in this bank, previous period set Clients-Loans-with-the-Bank 0 ; the total loans Firms in this bank set Number-of-Firm-Clients 0 set Number-of-Household-Clients 0 set Number-of-Clients 0 set Available-Credit-Basel2 0 ; maximum available credit under Basel II rules set Available-Credit-Basel31 0 ; maximum available credit under Basel III rules, Global Capital Framework set Available-Credit-Basel32 0 ; maximum available credit under Basel III rules, Global Liquidity Requirement set Available-Credit-Basel 0 ; maximum available credit under Basel rules set Own-Reserves 0 ; reserves of the bank, deposits multiplied by the reserve requirement set Need-Cash 0 ; initial value for cash needed after production, because heavy losses set Profit 0 ; revenue less the expenditures, considering taxes set PBT 0 ; profits before taxes set I-Received 0 ; local variable set D-Received 0 ; local variable set Overdraft 0 ; this is the difference betwween own liquid assets and losses ; properties relocated from the setup-globals set Available-Credit-Basel 0 ; this is the credit limit to retail banks from Basel macroprudential rules set Available-Credit-Basel2 0 ; maximum available credit under Basel II rules set Available-Credit-Basel31 0 ; maximum available credit under Basel III rules, Global Capital Framework set Available-Credit-Basel32 0 ; maximum available credit under Basel III rules, Global Liquidity Requirement ] end to Setup-C-Firms ask n-of Number-of-C-Firms patches [ ; this command asks a number of patches controlled by a slider with random coordinates sprout-Firms 1 [ ; ask to create one firm at these patches move-to one-of patches with [not any? Firms-here] ; if a C-Firm and K-Firm are at the same patch, move the K-Firm in the setup process set shape "factory" ; just for fun, not necessary for the model, used only for display in HUD netlogo set size 2 ; just for fun, not necessary for the model, used only for display in HUD netlogo set color orange ; just for fun, not necessary for the model, used only for display in HUD netlogo set C-Firm? true ; proper of the Firms, true means it is a consumption producer firm set Owner? true ; this firm will have an owner set Price 2 ; initial value for price set Capital Initial-capital ; initial value for capital set Stock Initial-production-C-firms ; initial value for stock set Production Initial-production-C-firms ; initial value for production set Revenue 0 ; initial value for revenue set Sales 0 ; initial value for sales set Profit 0 ; revenue less the expenditures, considering taxes set PBT 0 ; profits before taxes set Need-Cash 0 ; initial value for cash needed before production, because lack of liquidity for starting it set Cases-of-Bankruptcy 0 ; the total number of bankruptcies by this firm set Available-Credit-Assenza 0 ; maximum available credit under internal risk calculations of the bank set Desired-Investment 0 ; initial value for desire investment set Investment 0 ; initial value for investment set Number-of-Employees 0 ; initial value for number of employees set Need-of-Employees 0 ; initial value for desire employees set K-Firm-List [ ] ; setup for the list which will be used to colect the K-Firms visited set Vacancy 0 ; initial value for vacancy set Bank-Account-Firm Initial-liquidity-of-Firms ; initial money deposited at the bank by the firms set Investment-Memory Initial-Capital ; initial value for Investment-Memory, parameter utilized to calculate the desire investment set Util-Capacity 0 ; initial value for util-capacity create-banker-from min-one-of banks [distance myself] [set hidden? true] ; this create a link between the bank and the capitalist set My-Nearest-Bank min-one-of banks [distance myself] ; this bank is the same to which the C-Firms is now linked with a "banker" relationship ] ] end to Setup-K-Firms ask n-of Number-of-K-Firms patches [ ; this command asks a number of patches controlled by a slider randomly selected sprout-Firms 1 [ ; ask to create one firm in each of those patches move-to one-of patches with [not any? Firms-here] ; if a C-Firm and K-Firm are at the same patch, move the K-Firm in the setup process set shape "factory" ; just for fun, not necessary for the model, used only for display in HUD netlogo set size 2 ; just for fun, not necessary for the model, used only for display in HUD netlogo set color green ; just for fun, not necessary for the model, used only for display in HUD netlogo set C-Firm? false ; proper of Firms, false mean it is a capital producer firm set Owner? true ; this firm will have an owner set Price 2 ; initial value for price set Stock Initial-production-K-firms ; initial value for stock set Production Initial-production-K-firms ; initial value for production set Revenue 0 ; initial value for revenue set Sales 0 ; initial value for sales set Profit 0 ; revenue less the expenditures, considering taxes set PBT 0 ; profits before taxes set Need-Cash 0 ; initial value for cash needed before production, because lack of liquidity for starting it set Cases-of-Bankruptcy 0 ; the total number of bankruptcies by this firm set Available-Credit-Assenza 0 ; maximum available credit under internal risk calculations of the bank set Desired-Investment "" ; not applied to K-Firms set Investment "" ; not applied to K-Firms set Number-of-Employees 0 ; initial number for employees set Need-of-Employees 0 ; initial value for desired employees set Vacancy 0 ; initial value for vacancy set Bank-Account-Firm Initial-liquidity-of-Firms ; initial money deposited at the banks by the firms set Investment-Memory "" ; not applied to K-Firms set Util-Capacity "" ; not applied to K-Firms create-banker-from min-one-of banks [distance myself] [set hidden? true] ; this create a link between the bank and the capitalist set My-Nearest-Bank min-one-of banks [distance myself] ; this bank is the same to which the K-Firms is now linked with a "banker" relationship ] ] end to Setup-Workers create-Households Number-of-Workers [ setxy random-xcor random-ycor ; the initial position of the worker is random set shape "person" ; just for fun, not necessary for the model, used only for display in HUD netlogo set size 1.25 ; just for fun, not necessary for the model, used only for display in HUD netlogo set color yellow ; just for fun, not necessary for the model, used only for display in HUD netlogo set Worker? true ; property of the household, "true" indicates it is a worker set Employed? false ; all workers are unemployed at the start set Human-Wealth 1 ; initial value for Human Wealth, utilized to calculate the consumption process set Current-Income 0 ; intitial income set Bank-Account-Household Initial-households-personal-assets ; initial value of deposits at the banks set Desired-Consumption 0 ; initial value for desired Consumption set Consumption 0 ; initial value for Consumption set C-Firm-List [ ] ; setup for the list which will be used to record the C-Firms visited create-banker-from min-one-of banks [distance myself] [set hidden? true] ; this create a link between the bank and the capitalist set My-Nearest-Bank min-one-of banks [distance myself] ; this bank is the same to which the Worker is now linked with a "banker" relationship ] end to Setup-Capitalists create-Households (Number-of-C-Firms + Number-of-K-Firms) [ ; one capitalist for each firm distributed ramdomly in space setxy random-xcor random-ycor ; the initial position of the worker is random set shape "person" ; just for fun, not necessary for the model, used only for display in HUD netlogo set size 1.25 ; just for fun, not necessary for the model, used only for display in HUD netlogo set color white ; just for fun, not necessary for the model, used only for display in HUD netlogo set Worker? false ; proper of the household, false means it is a capitalist set Bankrupt? false set Human-Wealth 1 ; initial value for human wealth set Current-Income 0 ; initial value for current income set Bank-Account-Household Initial-households-personal-assets ; initial value for deposit at bank set Desired-Consumption 0 ; initial value for Desired-Consumption, D-C is the budget allocated to consumption set Consumption 0 ; initial value of Consumption set C-Firm-List [ ] ; setup for the list which will be used to collect the price of the C-Firms visited create-owner-from one-of Firms with [not any? out-link-neighbors] [set hidden? true] ; this create a link between the firm and the capitalist create-banker-from min-one-of banks [distance myself] [set hidden? true] ; this create a link between the bank and the capitalist set My-Nearest-Bank min-one-of banks [distance myself] ; this bank is the same to which the Capitalist is now linked with a "banker" relationship ] end ; TO GO to Go Function-Job-Market ; this function plays the job market process Function-Consumption-Market ; this function plays the consumption market process Function-Capital-Market ; this function plays the capital market process Function-UpDate-Production ; this function plays the production process Function-UpDate-Globals ; this function update the globals Function-Cash-Flows-Dividends ; this function update the cash flow and set the dividends Function-Credit-Market ; this function update the credit market Function-Central-Bank ; this function give loans to the banking system and set macropudential rules and monetary policy Function-State-Manage-Budget ; the government appears getting taxes and giving subsidies to families, helping banks and during a crisis period and selling public debt Function-Update-System tick ; netlogo needs this because it controlates time end ; FUNCTIONS ; TO FUNCTION-JOB-MARKET To Function-Job-Market ; here will be called the subfunctions ask Firms [ ; reset the firms need for cash and update the desire workers number SubF-UpDate-Desired-Workers set Need-Cash 0 ] ask Workers with [Current-Income = 0] [ ; ask workers which do not have a job to look for one SubF-Find-a-Job ] ask Workers [ set Bank-Account-Household Bank-Account-Household + Current-Income ] ; ask workers to update their income ask Firms [ set Bank-Account-Firm Bank-Account-Firm - Number-of-Employees * wage ] ; ask firms to update their bank account end to SubF-UpDate-Desired-Workers ; this subfunction update the desired workers if C-Firm? [ ; only C-Firms run this set Need-of-Employees min list Need-of-Employees ((Capital * Productivity-of-capital) / Productivity-of-labor) ; set desire employee considering the capital production restriction (Assenza, Gatti, Grazzini et al. 2015, eq. 5.9) if Hiring-Rationality? [ ; if this switch is on, the firm will hire employees limited to the Bank-Account-Firm resources if Need-of-Employees * Wage > Bank-Account-Firm [ ; if Need-of-Employees multiplied by wage is larger than the Bank-Account, the Need-of-Employees is updated set Need-of-Employees max list 0 (int (Bank-Account-Firm / Wage) + 1) ; update the desired employees considering the money available ] ] ] set Vacancy Need-of-Employees - Number-of-Employees ; opening new vacancies to contract more employees while [Vacancy < 0 and Number-of-Employees > 0] [ ; if vacancy < 0 the firm needs to fire someone ask one-of my-out-hireds [ ; choose one employee ask other-end [ ; ask this employee to set... set Current-Income 0 ; their income as 0, it was fired (die) set Employed? false ; the worker is now unemployed ] die ; "die" means this worker is fired (the link disappears) ] set Vacancy Vacancy + 1 ; record the fired worker set Number-of-Employees Number-of-Employees - 1 ; update the number of employees after the firing process ] end to SubF-Find-a-Job ; this subfunction is used by the worker trying to find a job position let extension 0 repeat 3 [ ; the worker will repeteat the process two times if Employed? = true [ stop ] ; if the worker finds a job the seach process stops let aFirm one-of Firms in-radius (radius-for-employment-search + extension) with [Vacancy > 0 ] ; the worker looks for a firm around him with vacancies if aFirm != nobody [ create-hired-from one-of Firms-here [set hidden? true] ; this link means the worker has a job in a firm, and the two know about eachother set Current-Income Wage * (1 - tax1) ; update the current-income of the worker set State-Budget State-Budget + wage * tax1 ; the tax on income goes to the State set Employed? true ; the worker is employed now ask aFirm [ set Number-of-Employees Number-of-Employees + 1 ; update the number of employees set Vacancy Vacancy - 1 ; update the vacancies ] ] if aFirm = nobody [ set Current-Income 0 set extension extension + 10 ; a new search starts widening the radius ] ] if Do_We_Have_State? = true and Employed? = false [ SubF-Get-Unemployment-Benefits ; get unemployment benefits if the worker is unemployed ] end to SubF-Get-Unemployment-Benefits let Unemployment-Benefit Wage * Unemployment-Cover ; the unemployment benefits is a fraction (= u-cover) of the wage ifelse Do_We_Have_Central-Bank? = true and QEasing? = true [ ; if there is a Central Bank and Quantitative Easing policy, this authority will buy any amount of Public Debt, so there are no constraints set Current-Income Unemployment-Benefit ; if the worker is unemployed and his/her Current income is zero the State pays unemployment benefits set State-Budget State-Budget - Unemployment-Benefit ; the tax on income goes to the State set Helped-Households Helped-Households + 1 ; the total number of households helped is increased ] [ if State-Budget >= Unemployment-Benefit [ ; if there is enough budget available the State pays the benefits, and the Central Bank help is unnecessary set Current-Income Unemployment-Benefit ; if the worker is unemployed and its Current income is zero the State pays unemployment benefits, a tax free subsidy set State-Budget State-Budget - Unemployment-Benefit ; the tax on income goes to the State set Helped-Households Helped-Households + 1 ; the total number of households helped is increased ] ] end ; FUNCTION-CONSUMPTION-MARKET to Function-Consumption-Market ; here will be called the subfunctions of the consumption market ask C-Firms [ set Demand 0 set Sales 0 set Revenue 0 ] ; updating properties of the C-Firms ask Households [ ; explicit SubF-UpDate-Desired-Consumption ; call subfunction for households update their desired consumption SubF-Visit-C-Firms ; call subfunction for households visit firm trying to consume if Desired-Consumption > 0 [ SubF-Try-Consume ] ; if the household wish to consume something, it tries to buy it ] end to SubF-UpDate-Desired-Consumption set Human-Wealth (Memory-parameter-human-wealth * Human-Wealth) + (1 - Memory-parameter-human-wealth) * Current-Income ; update human wealth (eq 2) set Desired-Consumption min list Bank-Account-Household ((Fraction-of-wealth-devoted-to-consumption * Bank-Account-Household) + Human-Wealth) ; update desired consumption, it can not be higher than the money the household has set Desired-Consumption max list 0 Desired-Consumption ; this ensures the desired consumption is not negative end to SubF-Visit-C-Firms ; this subfunction rules the shopping process, visiting the firms set C-Firm-List sort-by [ [?1 ?2] -> [Price] of ?1 < [Price] of ?2] C-Firms in-radius 30 with [Stock > 0] ; we build a list with the C-Firms in the neighborhood ordered by price, assuming the household doesn't have the prices of all C-Firms because of time constraints end to SubF-Try-Consume ; the household doesn't take the lowest price... let listposition floor random-gamma 1.2 0.66 ; ... but applies a distribution to the ordered list, because information is not perfect, scale = 1/lambda, shape/lamda 1.2/0.66 CDF: 0 (0) 1 (0.39) 2 (0.66) 3 (0.81) 4 (0.90) if listposition >= (length C-Firm-List) [set listposition 0] ; in this way we increase the probability of the lowest price, by adding up those cases in which the gamma give us a number larger than the length of the list print listposition let Selected-C-Firm (item listposition C-Firm-List) ; auxiliar variable let Qtt Desired-Consumption / [Price] of Selected-C-Firm ; total number of consumption goods desired let expenses 0 ; auxiliar variable to update the deposit at bank later let new-cons 0 ; auxiliar variable to record the quantity consumed while [Qtt > 0 and empty? C-Firm-List = false] [ ; if there is desired-consumption not satisfied and the list of firms is not empty... ask Selected-C-Firm [ ifelse [Stock] of Selected-C-Firm > Qtt [ ; if there are enough available goods at the first firm ... set Demand Demand + Qtt ; update the demand of Selected-Firm set Stock Stock - Qtt ; updated the stock of the firm set Sales Sales + Qtt ; update the sales set Revenue Revenue + Price * Qtt ; update the revenue set Expenses Expenses + Price * Qtt * (1 + tax3) ; update the auxiliar variable, used later to update the household bank account set State-Budget State-Budget + Price * Qtt * tax3 ; update State's budget considering consumption taxes (tax3) set new-cons new-cons + Qtt ; update the auxiliar variable to register the qtt consumed set Qtt 0 ; means no need to bought anymore ] [ ; second situation, buying only part at the first firm set Sales Sales + Stock ; update sales set Revenue Price * Stock + Revenue ; update revenue set expenses Price * Stock * (1 + tax3) + expenses ; update auxiliar variable, later used to update the bank account of the household set State-Budget State-Budget + Price * Stock * tax3 ; update State income set new-cons new-cons + Stock ; update stock set Qtt Qtt - Stock ; update auxiliar variable to register the Qtt consumed, Qtt = Qtt - S set Stock 0 ; update stock ] ] set C-Firm-List remove-item listposition C-Firm-List ; we remove the Firm with depleted Stock set listposition floor random-gamma 1.2 0.66 ; the firm don't take the lowest price, but applies a distribution to the list, because information is not perfect, scale = 1/lambda, shape/lamda 1.2/0.66 CDF: 0 (0) 1 (0.39) 2 (0.66) 3 (0.81) 4 (0.90) if listposition >= (length C-Firm-List) [set listposition 0] ; in this way we increase the probability of the lowest price, by adding up those cases in which the gamma give us a number larger than the length of the list, the maximum length of the list set Selected-C-Firm (item listposition C-Firm-List) ; auxiliar variable, record the quantity that can be bought, DC/Pa ] set Consumption new-cons ; update the Consume of the households, the real value that the household did consume set Bank-Account-Household Bank-Account-Household - expenses ; update the bank account of the households with the remaining money after the purchasing process end ; FUNCTION-CAPITAL-MARKET to Function-Capital-Market ; this function set the rules for the capital goods market ask K-Firms [ ; update K-Firms properties set Demand 0 set Revenue 0 set Sales 0 ] ask C-Firms [ ; updating the C-Firms properties set Investment 0 SubF-UpDate-Investment-Desire ; call sub-function to update investment if Desired-Investment > 0 [ SubF-UpDate-Investment ] ; if there is need for investment call the sub-function for investment ] end to SubF-UpDate-Investment-Desire ; sub-function with procedure to update the investment need of a C-Firm set Desired-Investment 0 ; reset variable let rand random-float 1 ; auxiliar sub-function variable if rand < Probability-of-investing [ ; check if it is time to invest, because only a fraction of C-Firms (= probability) can invest if ticks > 1 [ ; assure that there is no investment in time equal zero set Investment-Memory (Memory-parameter-investment * Investment-Memory) + (1 - Memory-parameter-investment) * Util-Capacity * Capital ; begin of equation of capital motion (eq 10 & Assenza, Gatti, Grazzini et al. 2015, p. 12) set Desired-Investment max list 0 (( (1 / Desired-capacity-utilization-rate) + (Depreciation-of-capital-C / Probability-of-investing) ) * Investment-Memory - Capital) ; end of equation of capital motion (eq 12 & Assenza, Gatti, Grazzini et al. 2015 eq. 5.7) ] ] end to SubF-UpDate-Investment ; this subfunction is called when there is need for investment (asking C-Firms) if Desired-Investment > 0 [ ; just trying to find product in two diferents K-Firms SubF-Visit-K-Firms ; make a list with all K-Firms, take note of their prices SubF-Buy-Capital ; sub-function used to bought capital ] end to SubF-Visit-K-Firms ; this subfunction rules the shopping process, visiting the firms set K-Firm-List sort-by [ [?1 ?2] -> [Price] of ?1 < [Price] of ?2] K-Firms with [Stock > 0] ; we build a list with the all the K-Firms ordered by price. We have the prices of all K-Firms because they are few and capital is expensive end ; C-Firms have no constraits and they have a complete list and make no mistakes in ordering the prices to SubF-Buy-Capital ; asking C-Firms let Selected-K-Firm first K-Firm-List ; auxiliar variable let Qtt Desired-Consumption / [Price] of Selected-K-Firm ; total number of consumption goods desired let expenses 0 ; auxiliar variable to update the deposit at bank later let new-inv 0 ; auxiliar variable to record the quantity of capital adquired by the C-Firm while [Qtt > 0 and empty? K-Firm-List = false] [ ask Selected-K-Firm [ ifelse [Stock] of Selected-K-Firm > Qtt [ ; if there is not available goods at the first firm ... set Demand Demand + Qtt ; update the demand of Selected-Firm set Stock Stock - Qtt ; updated the stock of the firm set Sales Sales + Qtt ; update the sales set Revenue Revenue + Price * Qtt ; update the revenue set Expenses Expenses + Price * Qtt ; update the auxiliar variable, used later to update the household bank account set new-inv new-inv + Qtt ; update the auxiliar variable to register the qtt consumed set Qtt 0 ; means no need to bought anymore ] [ ; second situation, buying only part at the first firm set Sales Sales + Stock ; update sales set Revenue Price * Stock + Revenue ; update revenue set expenses Price * Stock + Expenses ; update auxiliar variable, later used to update the bank account of the household set new-inv new-inv + Stock ; update stock set Qtt Qtt - Stock ; update auxiliar variable to register the Qtt consumed, Qtt = Qtt - S set Stock 0 ; update stock ] ] set K-Firm-List remove-item 0 K-Firm-List ; we remove the Firm with depleted Stock set Selected-K-Firm first K-Firm-List ; auxiliar variable ] set Investment new-inv ; update the Consumption of the households, the real value that the household did consume set Bank-Account-Firm Bank-Account-Firm - Expenses ; update the bank account of the households with the remaining money after the purchasing process end ; FUNCTION-UPDATE-PRODUCTION to Function-UpDate-Production ; this function update the production of Firms ask K-Firms [ ; updating the production of K-Firms (eqs 15, 17 & 18) set Production Number-of-Employees * Productivity-of-labor ; updating actual production set Stock Stock * (1 - Depreciation-of-capital-K) + Production ; updating stock, depreciation-of-capital is currently set at 2%, but K firms do not use capital so this is deterioration of unused stocks set Bank-Account-Firm Bank-Account-Firm + Revenue ; update bank account set Delta Production - Demand ; variable used to decide new production ifelse K-Qtt-Function? [ set Need-of-Employees Report-K-Update-Need-of-Employees ] ; if the switcher at HUD is turned on, you have a complex function below [ set Need-of-Employees Demand / Productivity-of-labor ] ; ... if the switcher at HUD is turned off, you have the easy way, and the demand determines the number of employees ifelse K-UpDate-Price? [ set Price Report-K-Update-Price ] ; if the switcher at HUD is turned on, you have a complex function below [ set Price Wage / Productivity-of-labor ] ; ... the switcher at HUD is turned off, you have the easy way ] ask C-Firms [ ; updating the production of C-Firms set Capital Capital - Capital * Util-Capacity * Depreciation-of-capital-C + Investment ; update the capital avalible for production process (eq 5.5 of Assenza, Gatti, Grazzini et al. 2015) set Production min list (Number-of-Employees * Productivity-of-labor) (Capital * Productivity-of-capital) ; update actual production limited by the available capital set Stock Production ; the C-Goods are perishable, so the actual stock are equal the production set Util-Capacity Production / (Capital * Productivity-of-capital) ; utilized capacity (eq 5.4 of Assenza, Gatti, Grazzini et al. 2015) set Bank-Account-Firm Bank-Account-Firm + Revenue ; update bank account set Delta Production - Demand ; variable used to decide new production level ifelse C-Qtt-Function? [ set Need-of-Employees Report-C-Update-Need-of-Employees ] ; if the switcher at HUD is turned on, you have a complex function below [ set Need-of-Employees Demand / Productivity-of-labor ] ; ... if the switcher at HUD is turned off, you have the easy way ifelse C-UpDate-Price? [ set Price Report-C-Update-Price ] ; if the switcher at HUD is turned on, you have a complex function below [ set Price Wage / Productivity-of-labor ] ; ... if the switcher at HUD is turned off, you have the easy way ] end to-report Report-C-Update-Price ; reporting the new price for C-Firms ... let N-P Price ; local auxiliar variable if (delta <= 0) and (Price < Goods-Price-Level) [ set N-P Price * (1 + random-float 1 * Price-adjust-parameter) ] ; rule to increase price, approaching it to that of the competitors... the jump is stochastic (eq 5.2 and fig.2 of Assenza, Gatti, Grazzini et al. 2015) if (delta > 0) and (Price > Goods-Price-Level) [ set N-P Price * (1 - random-float 1 * Price-adjust-parameter) ] ; rule to reduce price, approaching it to that of the competitors... the jump is stochastic (eq 5.2 and fig.2 of of Assenza, Gatti, Grazzini et al. 2015) report N-P ; report new price end to-report Report-K-Update-Price ; reporting the new price for K-firms let N-P Price ; local auxiliar variable if (delta <= 0) and (Price < Capital-Price-Level) [ set N-P Price * (1 + random-float 1 * Price-adjust-parameter ) ] ; rule to increase price, approaching it to that of the competitors... the jump is stochastic (eq 6.5 of Assenza, Gatti, Grazzini et al. 2015) if (delta > 0) and (Price > Capital-Price-Level) [ set N-P Price * (1 - random-float 1 * Price-adjust-parameter ) ] ; rule to reduce price, approaching it to that of the competitors... the jump is stochastic (eq 6.5 of Assenza, Gatti, Grazzini et al. 2015) report N-P ; report new price end to-report Report-C-Update-Need-of-Employees ; reporting new C-Firm needs for employees (eq 14) let N-E Number-of-Employees ; local auxiliar variable if (delta <= 0) and (Price >= Goods-Price-Level) [ set N-E ((Production - Quantity-adjust-parameter * delta) / productivity-of-labor) ] ; possible condition to increase actual number of employees and production (eq 5.1 and fig.2 of of Assenza, Gatti, Grazzini et al. 2015) if (delta > 0) and (Price < Goods-Price-Level) [ set N-E ((Production - Quantity-adjust-parameter * delta) / productivity-of-labor) ] ; other possible condition reduce actual number of employees and production (eq 5.1 and fig.2 of of Assenza, Gatti, Grazzini et al. 2015) report N-E ; report new desired employees end ; if (delta <= 0) and (Price < Goods-Price-Level) or the contrary the production does not change and the prices adjust to-report Report-K-Update-Need-of-Employees ; reporting new need for a C-firm employees let N-E Number-of-Employees ; local auxiliar variable if (delta <= 0) and (Price >= Capital-Price-Level) [ set N-E ((Production - Quantity-adjust-parameter * delta - Stock) / productivity-of-labor) ] ; possible condition to change actual number of employees and production, but we substract the stock (eq 6.6 of of Assenza, Gatti, Grazzini et al. 2015) if (delta > 0) and (Price < Capital-Price-Level) [ set N-E ((Production - Quantity-adjust-parameter * delta - Stock) / productivity-of-labor) ] ; other possible condition to change actual number of employees (eq 6.6 of of Assenza, Gatti, Grazzini et al. 2015) report N-E ; report new need for employees end ; UPDATE GLOBALS to Function-UpDate-Globals ; this function update the globals set Unemployment-Rate 1 - ((sum [Number-of-Employees] of Firms) / Number-of-Workers) ; update the unemployemnt rate set GDP_1 GDP ; store the previous value for the next period set GDP sum [Production] of Firms - sum [Stock] of K-Firms ; update the GDP, sum production - stocks if GDP < 0 [set GDP 1] ifelse GDP_1 > GDP [ set Recession-lenght Recession-lenght + 1 ; we define here a counter for recessions, to be used later ] [ set Recession-lenght 0 ; if there is no recession, the counter is set to zero ] if ticks > 1 [ set Growth-Rate (GDP - GDP_1) / GDP_1 ] if GDP_1 > GDP and Recession-lenght > 2 [ set QEasing? true ; QEasing means Quantitative Easing,and this is a policy that opens unlimited buying of Public Debt ] if GDP > GDP_1 or Recession-lenght = 0 [ set QEasing? false ; QEasing means Quantitative Easing,and this is a policy that opens unlimited buying of Public Debt ] set Total-Investment sum [Investment] of C-Firms ; update investment realized by the C-Firms set Total-Consumption sum [Consumption] of Households ; update the consumption set Total-Loans-Firms sum [Current-Retail-Loans] of Firms ; update the sum of retail loans, all firms set Total-Loans-C-Firms sum [Current-Retail-Loans] of C-Firms ; update the sum of retail loans for C-Firms set Total-Loans-K-Firms sum [Current-Retail-Loans] of K-Firms ; update the sum of retail loans for K-Firms set Total-Deposits-Workers sum [ Bank-Account-Household ] of Workers ; explicit set Total-Deposits-Capitalists sum [ Bank-Account-Household ] of Capitalists ; explicit set Total-Deposits-C-Firms sum [ Bank-Account-Firm ] of C-firms ; explicit set Total-Deposits-K-Firms sum [ Bank-Account-Firm ] of K-firms ; explicit set Total-Deposits_1 Total-Deposits ; explicit set Total-Deposits Total-Deposits-Workers + Total-Deposits-Capitalists + Total-Deposits-C-Firms + Total-Deposits-K-Firms ; explicit set Total-Interest-Payments sum [ Interest-Pay ] of Firms ; explicit set Total-Installment-Payments sum [ Installment-Pay ] of Firms ; explicit set Total-Reserves RR * Total-Deposits ; reserves of the banks deposited at the central bank set Goods-Price-Level_1 Goods-Price-Level ; store the Goods-Price-Level value for use with adaptative functions set Capital-Price-Level_1 Capital-Price-Level ; store the Capital-Price-Level value for use with adaptative functions if sum [Sales] of C-Firms != 0 [ set Goods-Price-Level sum [ Revenue ] of C-Firms / sum [Sales] of C-Firms ] ; update the goods price level if sum [Sales] of K-Firms != 0 [ set Capital-Price-Level sum [ Revenue ] of K-Firms / sum [Sales] of K-Firms ] ; update the capital price level set Current-Number-of-C-Firms count C-Firms ; current number of C-Firms set Current-Number-of-K-Firms count K-Firms ; current number of K-Firms set Current-Number-of-Workers count Workers ; current number of Workers end ; FUNCTION-CASH-FLOWS AND DIVIDENDS to Function-Cash-Flows-Dividends ; this function sets the payment of dividends and cash-flows adjustments ask C-Firms [ ; Cash flow of C-Firms set PBT Revenue + Bank-Account-Firm * eta3 - Number-of-Employees * Wage - Desired-Investment * Capital-Price-Level - (annuity-rate + eta0) * Current-Retail-Loans ; PBT is profits before taxes let div 0 ; auxiliar variable if Dividends-Payments? [ ; HUD control for activating dividends payments if PBT > 0 [ ; if the PBT is positive, the firm pay dividends and taxes set Profit PBT * (1 - tax2) ; the profit is reduced by a tax set State-Budget State-Budget + PBT * tax2 ; the State collects the taxes set Dividend Dividend-payout-ratio * Profit ; if there was a positive profit, setup dividend, the income of capitalists set Bank-Account-Firm Bank-Account-Firm - Dividend ; reduce the bank account the dividend which will be payed to the capitalist set Div Dividend ; auxiliar variable bring the div to the capitalist later ask one-of my-out-owners [ ; calling the owner of this firm, where my-out-calls "all links you can use to travel from this node" ask other-end [ ; at other end of the link is the capitalist set Current-Income div * (1 - tax1) ; update the current income, substracting the income taxes set Bank-Account-Household Bank-Account-Household + Current-Income ; update the household bank account of the capitalist set State-Budget State-Budget + div * tax1 ; the State collects the income taxes on this dividend ] ; end asking capitalist ] ; end asking link ] ; end PBT > 0 if PBT <= 0 [ ; if the profit is negative (losses) the problems appear set Profit PBT ; if the profit was zero or negative, the tax is zero ifelse Bank-Account-Firm >= abs Profit [ set Bank-Account-Firm Bank-Account-Firm - abs Profit ; the losses reduce the bank-account of the firm ] [ ; if the losses are larger than the bank-account of the firm a bakruptcy process starts set Overdraft abs Profit - Bank-Account-Firm ; overdraft are losses not covered by the money available at the bank account set Bank-Account-Firm 0 ; the losses deplete the bank account of the firm ask one-of my-out-owners [ ; calling the owner of this firm, where my-out-calls "all links you can use to travel from this node" ask other-end [ ; at other end of the link is the capitalist ifelse Bank-Account-Household >= Overdraft [ set Current-Income 0 ; update the current income of the capitalist set Bank-Account-Household Bank-Account-Household - Overdraft ; the capitalist of the firm has to recapitalize it using his own bank-account ] [ set Bankrupt? true SubF-Capitalist-Damnation ] ; end the overdraft and liquidation process ] ; end the negative profit process ] ; end the dividends distribution process ] ] ] ] ; end asking C-Firms ask K-Firms [ ; Cash flow of K-Firms set PBT Revenue + Bank-Account-Firm * eta3 - Number-of-Employees * Wage - (annuity-rate + eta0) * Current-Retail-Loans ; PBT is profits before taxes let div 0 ; auxiliar variable if Dividends-Payments? [ ; HUD control for activating dividends payments if PBT > 0 [ ; if the profit is positive, the firm pay dividends and taxes set Profit PBT * (1 - tax2) ; the profit is reduced by a tax set State-Budget State-Budget + PBT * tax2 ; the State collects the taxes set Dividend Dividend-payout-ratio * Profit ; if there was a positive profit, setup dividend, the income of capitalists set Bank-Account-Firm Bank-Account-Firm - Dividend ; reduce the bank account by the dividend which will be payed to the capitalist set div Dividend ; auxiliar variable bring the div to the capitalist later ask one-of my-out-owners [ ; calling the owner of this firm, where my-out-calls "all links you can use to travel from this node". ask other-end [ ; at other end of the link is the capitalist set Current-Income div * (1 - tax1) ; update the current income, substracting the income taxes set Bank-Account-Household Bank-Account-Household + Current-Income ; update the household bank account set State-Budget State-Budget + div * tax1 ; the State collects the taxes ] ] ] if PBT <= 0 [ ; if the profit before taxes is negative (losses) the problems appear set Profit PBT ; if the profit was zero or negative, the tax is zero ifelse Bank-Account-Firm >= abs Profit [ set Bank-Account-Firm Bank-Account-Firm - abs Profit ; the losses reduce the bank-account of the firms ] [ ; if the losses are larger than the bank-account of the firm set Overdraft abs Profit - Bank-Account-Firm ; overdraft are losses not covered by the money available at the Bank Accounts set Bank-Account-Firm 0 ; the losses deplete the bank-account of the firms ask one-of my-out-owners [ ; calling the owner of this firm, where my-out-calls "all links you can use to travel from this node". ask other-end [ ; at other end of the link is the capitalist let Unassumed-Losses Overdraft - Bank-Account-Household ; the losses not covered by the capitalist's money lead to the dismantlement of the firm if Unassumed-Losses <= 0 [ set Current-Income 0 ; update the current income of the capitalist set Bank-Account-Household Bank-Account-Household - Overdraft ; the capitalist of the firm has to recapitalize it using his own bank-account ] ; end of the procedure of heavy losses in which the capitalist is called for sustaining the firm if Unassumed-Losses > 0 [ set Bankrupt? true SubF-Capitalist-Damnation ] ; end procedure previous to bankruptcy ] ; end ask capitalist ] ; end ask one-of my-out-owners ] ; end the overdraft and liquidation process ] ; end the negative profit process ] ; end the dividends distribution process ] ; end asking K-Firms ask Banks [ ; Now lets see the cash flow of Banks let div 0 ; auxiliar variable set Clients-Accounts-C-Firms sum [ Bank-Account-Firm ] of out-banker-neighbors with [C-Firm? = true ] ; bank accounts of the C-Firms at a particular bank set Clients-Accounts-K-Firms sum [ Bank-Account-Firm ] of out-banker-neighbors with [C-Firm? = false] ; bank accounts of the K-Firms at a particular bank set Clients-Accounts-Firms Clients-Accounts-C-Firms + Clients-Accounts-K-Firms ; bank accounts of Firms at a particular bank set Clients-Accounts-Workers sum [ Bank-Account-Household ] of out-banker-neighbors with [Worker? = true ] ; bank accounts of the Workers at a particular bank set Clients-Accounts-Capitalists sum [ Bank-Account-Household ] of out-banker-neighbors with [Worker? = false] ; bank accounts of the Capitalists at a particular bank set Clients-Accounts-Households Clients-Accounts-Capitalists + Clients-Accounts-Workers ; bank accounts of the Households at a particular bank set Clients-Accounts-at-the-Bank_1 Clients-Accounts-at-the-Bank set Clients-Accounts-at-the-Bank Clients-Accounts-Firms + Clients-Accounts-Households ; total bank accounts of firms and households at a particular bank set Clients-Loans-C-Firms sum [ Current-Retail-Loans ] of out-banker-neighbors with [C-Firm? = true] ; loans to C-Firms of a particular bank set Clients-Loans-K-Firms sum [ Current-Retail-Loans ] of out-banker-neighbors with [C-Firm? = false] ; loans to K-Firms of a particular bank set Clients-Loans-with-the-Bank_1 Clients-Loans-with-the-Bank set Clients-Loans-with-the-Bank Clients-Loans-K-Firms + Clients-Loans-C-Firms ; total loans to Firms of a particular bank set Number-of-Firm-Clients count out-banker-neighbors with [shape = "factory"] ; total number of firm clients (with accounts or loans) with this bank set Number-of-Household-Clients count out-banker-neighbors with [shape = "person"] ; total number of household clients (with accounts) with this bank set Number-of-Clients Number-of-Firm-Clients + Number-of-Household-Clients ; total number of clients (any kind) with this bank set Shares Own-Bank-Capital / (Current-Number-of-C-Firms + Current-Number-of-K-Firms) ; the shares of the bank, one for every capitalist set I-Received sum [ Interest-Pay ] of out-banker-neighbors with [shape = "factory"] ; total interest payments of firms to a particular bank set D-Received sum [ Installment-Pay ] of out-banker-neighbors with [shape = "factory"] ; total installment payments of firms to a particular bank set Own-Reserves RR * Clients-Accounts-at-the-Bank ; reserves of the banks deposited at the central bank set PBT I-Received + Own-Reserves * eta4 - Central-Bank-Loans * (eta2 + annuity-rate) ; the profit income minus expenditures if Dividends-Payments? [ ; HUD control for activating dividends payments ifelse Profit > 0 [ ; if the profit is positive, the firm pay dividends and taxes set Profit PBT * (1 - tax2) ; the profit is reduced by a tax set State-budget State-budget + Profit * tax2 ; the State collects the taxes set Dividend Dividend-payout-ratio * Profit ; if there was a positive profit, setup dividend, the income of capitalists set Own-Bank-Capital Own-Bank-Capital + Profit * (1 - tax2) - Dividend ; reduce the bank account the dividend which will be paid to the capitalist set Div Dividend / (Current-Number-of-C-Firms + Current-Number-of-K-Firms) ; calculate dividend as part of the total profit divided by capitalists (everyone have a share) ask Capitalists [ ; call each of one of the capitalist let Number-of-Capitalists Current-Number-of-C-Firms + Current-Number-of-K-Firms ; total number of Capitalists set Current-Income Current-Income + div * (1 - tax1) ; increase the income of the capitalist with this new dividend set Bank-Account-Household Bank-Account-Household + div * (1 - tax1) ; update the bank account of the capitalist set State-Budget State-Budget + tax1 * div ; the State gets the income taxes ] ] [ ; if the profit is negative (losses) the problems start to show up ifelse Own-Bank-Capital >= abs Profit [ ; the bank has liquidity for compensating the loss set Own-Bank-Capital Own-Bank-Capital - abs Profit ; the losses reduce the Own-Bank-Capital of the bank ask Capitalists [ set Current-Income Current-Income + 0 ; update the current income of the capitalist, but we have to consider this is a secondary source of income for them ] ] [ ; if the losses are larger than the Own-Bank-Capital set Overdraft abs Profit - Own-Bank-Capital ; overdraft are the losses not covered by the Own-Bank-Capital set Own-Bank-Capital 0 ; the losses deplete the Own-Bank-Capital and then... ifelse Do_We_Have_State? [ ; untenable losses... if there exist a government and taxes... (we are asking banks) SubF-Call-Rescue-From-State ; ...the State goes to rescue the retail bank ] [ SubF-Go-Bankruptcy-Banks ; but if the State does not exist, the retail bank starts a bankruptcy process ] ] ; end procedure previous to bankruptcy ] ; end of the managing losses process ] ; end of dividends procedure for banks ] ; end of ask banks end to SubF-Capitalist-Damnation ask Capitalists with [Bankrupt? = true] [ set Current-Income 0 ; update the current income of the capitalist/owner set Bank-Account-Household Initial-households-personal-assets ; update the bank account of the capitalist/owner set Worker? true ; the capitalist becomes a worker... life is unfair set Employed? false ; this worker is unemployed at the start set color yellow ; now you are a worker and look like one set size 1.25 set Human-Wealth 1 set Desired-Consumption 0 set Consumption 0 set C-Firm-List [ ] ask in-owner-neighbors [ die ] ; and the former firm he/she owned vanishes set Current-Number-of-C-Firms Current-Number-of-C-Firms - 1 ; we correct the number of C-Firms in this economy ] ; end procedure previous to bankruptcy end to SubF-Call-Rescue-From-State if Do_We_Have_Central-Bank? = true and QEasing? = true [ ; if the Central Bank exists and it buys public debt without limits, all the deficit is converted to government bonds sold to the CB set State-Budget State-Budget - Initial-equity-of-the-bank - Overdraft ; in this case the government pays the recapitalization of the bank and the unpaid overdraft set Own-Bank-Capital Initial-equity-of-the-bank set Profit 0 ] if State-Budget >= (Initial-equity-of-the-bank + Overdraft) and Do_We_Have_Central-Bank? = false [ ; if the Central Bank does not exist, the State helps the bank only if the budget has enough resources set State-Budget State-Budget - Initial-equity-of-the-bank - Overdraft ; in this case the government pays the recapitalization of the bank and the unpaid overdraft set Own-Bank-Capital Initial-equity-of-the-bank set Profit 0 ] if State-Budget >= (Initial-equity-of-the-bank + Overdraft) and Do_We_Have_Central-Bank? = true and QEasing? = false [ ; if the Central Bank exists but the Quantitative Easing policy is not activated, the State helps the bank only if the budget has enough resources set State-Budget State-Budget - Initial-equity-of-the-bank - Overdraft ; in this case the government pays the recapitalization of the bank and the unpaid overdraft set Own-Bank-Capital Initial-equity-of-the-bank set Profit 0 ] if State-Budget <= (Initial-equity-of-the-bank + Overdraft) and Do_We_Have_Central-Bank? = false [ ; if the Central Bank does not exist and the State budget has not enough resources... SubF-Go-Bankruptcy-Banks ; ... the bankruptcy process is started ] if State-Budget <= (Initial-equity-of-the-bank + Overdraft) and Do_We_Have_Central-Bank? = true and QEasing? = false [ ; if the Central Bank exists but the Quantitative Easing policy is not activated and the State budget hasn't enough resources... SubF-Go-Bankruptcy-Banks ; ... the bankruptcy process is started ] end to SubF-Go-Bankruptcy-Banks ; this subfunction rules the process for the Bank bankruptcy and rebuilding using capitalits' resources. We ask banks here. set B-Broke B-Broke + 1 ; increase the global parameter that counts the broke status let Original-Shares Initial-equity-of-the-bank / (Current-Number-of-C-Firms + Current-Number-of-K-Firms) ; the original price of a share, before any serious problem appears let Bank-Owners Capitalists with [Bank-Account-Household >= Original-Shares] ; this implies a bail-in, because the capitalits will be forced to buy again one share let Broken-Capitalists Capitalists with [Bank-Account-Household < Original-Shares] ; excluded capitalists are those unable to restitute their share in the banking sector, and their number is adjusted below let New-Shares Original-Shares ; we prepare this instrumental variable for repeated use later let New-Shares_1 0 ; we prepare this instrumental variable for repeated use later while [New-Shares > New-Shares_1] [ set New-Shares_1 New-Shares set New-Shares Initial-equity-of-the-bank / (count Bank-Owners) ; the capitalists unable to afford a new share are excluded, but as a consecuence, the price per share increases set Bank-Owners Capitalists with [Bank-Account-Household >= New-Shares] ; this implies a bail-in set Broken-Capitalists Capitalists with [Bank-Account-Household < New-Shares] ; broken capitalists are unable to restitute their share in the banking sector, and they will lose their "capitalist" status ] ask Bank-Owners [ set Bank-Account-Household Bank-Account-Household - New-Shares ; update the bank account of the capitalist, reducing the account due to the money used to rebuild the bank ] ask Broken-Capitalists [ ; the capitalists unable to pay for the bail-in will be broken set Bank-Account-Household 0 ; the capitalist unable to pay for the new shares get broken set Worker? true ; the capitalist is broken, and he/she becomes a poor worker set Number-of-Workers Number-of-Workers + 1 set color yellow ; just for fun, not necessary for the model, used only for display in HUD netlogo set Human-Wealth 1 ; initial value for Human Wealth, utilized to calculate the consumption process set Current-Income 0 ; intitial income set Bank-Account-Household Initial-households-personal-assets ; initial value of deposits at the banks, a vital minimum set Desired-Consumption 0 ; initial value for desire Consumption set Consumption 0 ; initial value for Consumption set C-Firm-List [ ] ; setup for the list which will be used to colect the C-Firms visited set Employed? false ; the ex-capitalist is now an unemployed worker and he has to look for an employment... life is hard... ask one-of my-in-owners [ ; we identify the firm (K or C) previously owned by the broken capitalist... my-in-breed means "all links that you can use to travel to this node". ask end1 [ set Owner? false ] ; ...the firm at the other end of the link now is deprived of a proper owner die ; the link representing ownership dies, the problem now is looking for a new owner for that orphan firm... ] ] let Newcapitalist n-of 1 Workers with-max [ Bank-Account-Household ] ; ...the orphan C-Firm or K-Firm needs one new owner, so we ask the worker with the highest savings to buy the Firm and become a capitalist ask Newcapitalist [ ; before we proceed to transform a worker into a capitalist, we broke his/her current labor contract with a (different) firm ask one-of my-in-hireds [ ; the only link of this worker, future capitalist, is the labor contract ask other-end [ ; we contact with the firm for which this worker is employed set Vacancy Vacancy + 1 ; the worker leaves, so the firm adjust the vacancies adding an open job to the record set Number-of-Employees Number-of-Employees - 1 ; the firm losses one worker, which now is a capitalist unwilling to work ] die ; the link, the labor contract, dies or disappear ] set shape "person" ; the metamorphosis of this person is compplete now... he comes to a new (better) life... set size 1.25 ; just for fun, not necessary for the model, used only for display in HUD Netlogo set color white ; he becomes white as well, the color of wealthy capitalists set Worker? false ; false only means he/she is now a happy capitalist set Number-of-Workers Number-of-Workers - 1 create-owner-from one-of Firms with [Owner? = false] [set hidden? true] ; this command creates a link between the orphan firm and the new capitalist and in this way one will know each other for all the purposes ask out-owner-neighbors [ set Owner? true ] ; we identify the (C or K) firm previously owned by the broken capitalist and now owned by the lucky new capitalist... ] end ; FUNCTION-CREDIT-MARKET: CREDIT AND BANKRUPTCY PROCEDURES to Function-Credit-Market ; this function rules the credit market system SubF-Call-Matrix-Formation ; function to set the matrix used in R to calculate the life spam of firms set C-Broke 0 ; global variable for counting the total number of C-firms that went broke this period set K-Broke 0 ; global variable for counting the total number of K-firms that went broke this period set Total-Clients-Accounts sum [ Clients-Accounts-at-the-Bank ] of Banks ; this should be equal to Total-Deposits set Total-Client-Loans sum [ Clients-Loans-with-the-Bank ] of Banks ; this should be equal to Total-Loans-Firms ask Firms [ ; firms update their status with the retail bank SubF-Update-Installment ; to update the installment SubF-Update-Cash-Need ; to update firm cash need SubF-Update-Assets ; to update assets value SubF-Update-Leverage ; to update the leverage, all this is used to rule interest rate practiced later ] ask C-Firms [ SubF-Ask-for-C-Credit ; checks if this C-firm needs credit, it will be asked in this subfunction ] ask K-firms [ SubF-Ask-for-K-Credit ; checks if this K-Firm needs credit, it will be asked in this subfunction ] ask Banks [ ; the retail bank update the balance after the new was created if Do_We_Have_Central-Bank? [ SubF-Ask-for-Credit-to-Central-Bank ; the retail bank asks for credits to the Central Bank if reserves fall bellow the prescribed level ] set Assets max list 0 (Own-Reserves + Clients-Loans-C-Firms + Clients-Loans-K-Firms + Own-Bank-Capital) set Liabilities max list 0 (Clients-Accounts-Workers + Clients-Accounts-Capitalists + Clients-Accounts-C-Firms + Clients-Accounts-K-Firms + Central-Bank-Loans) set Bank-Equity Assets - Liabilities ] set Total-Central-Bank-Loans sum [Central-Bank-Loans] of Banks ; global variable that calculates the sum of all Central-Bank-Loans to retail banks if C-Broke-Procedure? [ ; switch check if the user want the broke procedure ask C-Firms [ ; this rules is for C-firm broke if (Cases-of-Bankruptcy > T-Ban) [ ; check if this firm did not pay their debts with a bank, where T-Ban (= 1, 2 o 4) are the Firm's number of periods unable to make payments before going to bankrupcy SubF-Go-Bankruptcy-C-Firms ; subfunction containing the bankruptcy process ] ] ] if K-Broke-Procedure? [ ; the same as the C-firm, check above for details ask K-Firms [ if (Cases-of-Bankruptcy > T-Ban) [ ; check if this firm did not pay their debts with a bank, where T-Ban (= 1, 2 o 4) are the Firm's number of periods unable to make payments before going to bankrupcy SubF-Go-Bankruptcy-K-Firms ; subfunction containing the bankruptcy process ] ] ] end to SubF-Call-Matrix-formation ; subfunction that manage the R routines ask C-Firms [ set Matrix-C-Firms-Bankruptcy matrix:set-and-report Matrix-C-Firms-Bankruptcy 1 Mjc Leverage ; update the second row of the matrix with information about C-Firms: every (1, Mjc) element is replaced by Leverage ifelse (Cases-of-Bankruptcy < T-Ban) ; update a position with 0 if the firm is alive, and 1 if the firm went bankrupt [ set Matrix-C-Firms-Bankruptcy matrix:set-and-report Matrix-C-Firms-Bankruptcy 0 Mjc 0 ] ; 0 is the first row, 1 the second row, etc. Mjc is the columns [ set Matrix-C-Firms-Bankruptcy matrix:set-and-report Matrix-C-Firms-Bankruptcy 0 Mjc 1 ] ; 0 is the first row, 1 the second row, etc. Mjc is the columns set Mjc Mjc + 1 if Mjc > (Time-Window1 - 1) [ set Mjc 0 ] ; move the matrix element to the next position, so the replacements in the matrix are sequential, and the time-window controls how many observations we'll have ] ask K-Firms [ set Matrix-K-Firms-Bankruptcy matrix:set-and-report Matrix-K-Firms-Bankruptcy 1 Mjk Leverage ; update the matrix with information about the K-firms ifelse (Cases-of-Bankruptcy < T-Ban) ; update a position with 0 if the firm is alive, and 1 if the firm went bankruptcy [ set Matrix-K-Firms-Bankruptcy matrix:set-and-report Matrix-K-Firms-Bankruptcy 0 Mjk 0 ] [ set Matrix-K-Firms-Bankruptcy matrix:set-and-report Matrix-K-Firms-Bankruptcy 0 Mjk 1 ] set Mjk Mjk + 1 if Mjk > (Time-Window1 - 1) [ set Mjk 0 ] ; move the matrix the next position, and the time-window controls how many observations we'll have ] let A matrix:get-row Matrix-C-Firms-Bankruptcy 0 ; create an object with the first row of the matrix, which contains 0s and 1s, if barkrupt or not let B matrix:get-row Matrix-C-Firms-Bankruptcy 1 ; create an object with the second row of the matrix, which contains the Leverage for every C-Firm r:put "a" A ; call the R and put there the object A r:put "b" B ; call the R and put there the object B r:eval "c <- glm(a ~ b, family = binomial)" ; call R and ask to solve the logistic function with the inputs A and B, gls stands for "generalized linear model", and binomial implies logit link between "a" and "b" let C r:get "c$coefficients" ; call R and the coefficients into object C set Beta_1-C-Firms first C ; save the beta-1 for C-firms if Beta_1-C-Firms < (- 25) [set Beta_1-C-Firms (- 25)] ; assure value into a meaninful range, because the first period there is not enough information set Beta_2-C-Firms last C ; save the beta-2 for C-firms if (Beta_2-C-Firms > 0) = false [ set Beta_2-C-Firms 0 ] ; assure value into a meaninful range, because the first period there is not enough information if Beta_2-C-Firms > 25 [ set Beta_2-C-Firms 25 ] ; assure value into a meaninful range, because the first period there is not enough information set A matrix:get-row Matrix-K-Firms-Bankruptcy 0 ; create an object with the first row of the matrix, which contains 0s and 1s, if barkrupt or not set B matrix:get-row Matrix-K-Firms-Bankruptcy 1 ; create an object with the seccond row of the matrix, which contains the Leverage for every K-Firm r:put "a" A ; call the R and put there the object A r:put "b" B ; call the R and put there the object B r:eval "c <- glm(a ~ b, family = binomial)" ; call R and ask to solve the logistic function with the inputs A and B, gls stands for "generalized linear model", and binomial implies logit link between "a" and "b" set C r:get "c$coefficients" ; the same as for the C-Firms, look above for details set Beta_1-K-Firms first C if Beta_1-K-Firms < (- 25) [ set Beta_1-K-Firms (- 25) ] set Beta_2-K-Firms last C if (Beta_2-K-Firms > 0) = false [ set Beta_2-K-Firms 0 ] if Beta_2-K-firms > 25 [ set Beta_2-K-Firms 25 ] end ; SUBFUNCTIONS FOR UPDATING THE SYSTEM STATE to SubF-Update-Installment ; this subfunction update the installment debt with retail banks (we are asking Firms) set Interest-Pay 0 ; reset parameter set Installment-Pay 0 ; reset parameter, the repayment schedule if Current-Retail-Loans > 0 [ ; check if exist loan ifelse Bank-Account-Firm >= ((annuity-rate + eta0) * Current-Retail-Loans) [ ; check if there is money enough to pay the debts set Interest-Pay eta0 * Current-Retail-Loans ; update the parameter with the value will be payed set Bank-Account-Firm Bank-Account-Firm - interest-pay ; update parameter set Installment-Pay annuity-rate * Current-Retail-Loans ; update parameter set Bank-Account-Firm Bank-Account-Firm - Installment-Pay ; update parameter set Current-Retail-Loans Current-Retail-Loans - Installment-Pay ; update parameter set Cases-of-Bankruptcy 0 ; as the firm pay debts this period, reset the parameter for bankruptcy ] [ set Cases-of-Bankruptcy Cases-of-Bankruptcy + 1 ; if the firm did not had money she will be closer and closer to bankruptcy ] ; bankruptcy happens when the firm is unable to pay its debt to the bank ] end to SubF-Update-Cash-Need ; subfuntion used for updating the need for cash (loans) before production takes place (need for liquidity)... (we are asking Firms) ifelse C-Firm? [ set Need-Cash max list 0 (Need-Cash + Number-of-Employees * Wage + Desired-Investment * Capital-Price-Level + (annuity-rate + eta0) * Current-Retail-Loans - Bank-Account-Firm) ] [ set Need-Cash max list 0 (Need-Cash + Number-of-Employees * Wage + (annuity-rate + eta0) * Current-Retail-Loans - Bank-Account-Firm) ] end to SubF-Update-Assets ; subfunction to update the assets, which differ from C-Firm to K-Firm type (we are asking Firms) ifelse C-Firm? [ set Assets max list 0 (Stock * Price + Bank-Account-Firm + Capital * Capital-Price-Level) set Liabilities max list 0 (Current-Retail-Loans) set Equity-C-Firms Assets - Liabilities ] [ set Assets max list 0 (Stock * Price + Bank-Account-Firm) set Liabilities max list 0 (Current-Retail-Loans) set Equity-K-Firms Assets - Liabilities ] end to SubF-Update-Leverage ; updating the leverage of a firm (we are asking Firms) if Need-Cash > 0 [ set Leverage (Current-Retail-Loans + Need-Cash) / (Assets + Current-Retail-Loans + Need-Cash) ] if (Current-Retail-Loans = 0) [ set Leverage 0 ] end ; CREDIT PROCESS to SubF-Ask-for-C-Credit ; this subfunction is called when there is need for a loan, we ask C-Firms ; how much money the nearest bank may offer as a loan, see eq. 8.11 in Assenza, Gatti, Grazzini et al. 2015 let Available-Credit-Assenza1 (Bank-loss-parameter * ([Bank-Equity] of My-Nearest-Bank - Probability-of-Bankruptcy * [Clients-Loans-with-the-Bank] of My-Nearest-Bank)) / Probability-of-Bankruptcy ; how much money the nearest bank may offer as a loan, see eq. 27 of Elder Silva's document let Available-Credit-Assenza2 Bank-loss-parameter * ([Bank-Equity] of My-Nearest-Bank * B-Lev * Risk - [Clients-Loans-with-the-Bank] of My-Nearest-Bank) set Available-Credit-Assenza min (list Available-Credit-Assenza1 Available-Credit-Assenza2) let Available-Credit Available-Credit-Assenza if (Need-Cash > 0) and ([Available-Credit-Basel] of My-Nearest-Bank > 0) and (Available-Credit >= Need-Cash) and (Cases-of-Bankruptcy < T-Ban) [ ; check if the need of a firm is lower then the available credit set Current-Retail-Loans Current-Retail-Loans + Need-Cash ; updating the loans parameter set Bank-Account-Firm Bank-Account-Firm + Need-Cash ; updating the bank account with the money received ask My-Nearest-Bank [ set Available-Credit-Basel Available-Credit-Basel - Need-Cash ] set Need-Cash 0 ] if (Need-Cash > 0) and ([Available-Credit-Basel] of My-Nearest-Bank > 0) and (Available-Credit < Need-Cash) and (Cases-of-Bankruptcy < T-Ban) [ ; check if the need of a firm is lower then the available credit set Current-Retail-Loans Current-Retail-Loans + Available-Credit ; the nearest bank offer a loan up to the limit set Bank-Account-Firm Bank-Account-Firm + Available-Credit ; updating the bank account with the money received ask My-Nearest-Bank [ set Available-Credit-Basel Available-Credit-Basel - Available-Credit ] set Need-Cash Need-Cash - Available-Credit ] ifelse Update-Interest? [ SubF-Update-Interest-Retail-C ] [ set eta0 taylor-interest-rate ] ; call a subfunction to update the interest rate of this firm end to SubF-Update-Interest-Retail-C ; update the interest rate of a C-firm set Probability-of-Bankruptcy (1 / (1 + e ^ ( - Beta_1-C-Firms - (Beta_2-C-Firms * leverage)))) ; save the probability of dying of this C-Firm, and for the Betas see above set T-expected (1 / Probability-of-Bankruptcy) ; calculate the life expectation of this firm (eq 24) let Numerator (1 + (taylor-interest-rate / annuity-rate)) ; local auxiliar variable, first part to calculate the new interest rate let Denominator ((1 - (1 - annuity-rate) ^ (T-expected + 1)) / annuity-rate) ; // // second part of the new interest rate let new-int Bank-gross-mark-up * ((numerator / denominator) - annuity-rate) ; calculating the new interest rate (eq 26 or 8.8 in Assenza, Gatti, Grazzini et al. 2015) set eta0 (eta0 * (Current-Retail-Loans - Need-Cash) + new-int * Need-Cash) / Current-Retail-Loans ; update the interest rate as mean of the new and the later interest rate end to SubF-Ask-for-K-Credit ; this subfunction is called when there is need for a loan, C-Firm type ; how much money the nearest bank may offer as a loan, see eq. 8.11 in Assenza, Gatti, Grazzini et al. 2015 let Available-Credit-Assenza1 (Bank-loss-parameter * ([Bank-Equity] of My-Nearest-Bank - Probability-of-Bankruptcy * [Clients-Loans-with-the-Bank] of My-Nearest-Bank)) / Probability-of-Bankruptcy ; how much money the nearest bank may offer as a loan, see eq. 27 of Elder Silva's document let Available-Credit-Assenza2 Bank-loss-parameter * ([Bank-Equity] of My-Nearest-Bank * B-Lev * Risk - [Clients-Loans-with-the-Bank] of My-Nearest-Bank) set Available-Credit-Assenza min (list Available-Credit-Assenza1 Available-Credit-Assenza2) let Available-Credit Available-Credit-Assenza if (Need-Cash > 0) and ([Available-Credit-Basel] of My-Nearest-Bank > 0) and (Available-Credit >= Need-Cash) and (Cases-of-Bankruptcy < T-Ban) [ ; check if the need of a firm is lower then the available credit set Current-Retail-Loans Current-Retail-Loans + Need-Cash ; updating the loans parameter set Bank-Account-Firm Bank-Account-Firm + Need-Cash ; updating the bank account with the money received ask My-Nearest-Bank [ set Available-Credit-Basel Available-Credit-Basel - Need-Cash ] set Need-Cash 0 ] if (Need-Cash > 0) and ([Available-Credit-Basel] of My-Nearest-Bank > 0) and (Available-Credit < Need-Cash) and (Cases-of-Bankruptcy < T-Ban) [ ; check if the need of a firm is lower then the available credit set Current-Retail-Loans Current-Retail-Loans + Available-Credit ; the nearest bank offer a loan up to the limit set Bank-Account-Firm Bank-Account-Firm + Available-Credit ; updating the bank account with the money received ask My-Nearest-Bank [ set Available-Credit-Basel Available-Credit-Basel - Available-Credit ] set Need-Cash Need-Cash - Available-Credit ] ifelse Update-Interest? [ SubF-Update-Interest-Retail-K ] [ set eta0 taylor-interest-rate ] ; call a subfunction to update the interest rate of this firm end to SubF-Update-Interest-Retail-K ; update the interest rate of a K-firm set Probability-of-Bankruptcy (1 / (1 + e ^ ( - Beta_1-K-Firms - (Beta_2-K-Firms * leverage)))) ; save the probability of dying of this K-Firm, and for the Betas see above set T-expected (1 / Probability-of-Bankruptcy) ; calculate the life expectation of this firm (eq 24) let Numerator (1 + (taylor-interest-rate / annuity-rate)) let Denominator ((1 - (1 - annuity-rate) ^ (T-expected + 1)) / annuity-rate) let new-int Bank-gross-mark-up * ((numerator / denominator) - annuity-rate) ; calculating the new interest rate (eq 26 or 8.9 in Assenza, Gatti, Grazzini et al. 2015) set eta0 (eta0 * (Current-Retail-Loans - Need-Cash) + new-int * Need-Cash) / Current-Retail-Loans end to SubF-Go-Bankruptcy-C-Firms ; this subfunction rules the process for the C-firm bankruptcy set C-Broke C-Broke + 1 ; increase the global parameter which count the broke status set Cases-of-Bankruptcy 0 ; reset the parameter ask out-owner-neighbors [ ; find out who is the owner of this firm ifelse Bank-Account-Household >= Initial-liquidity-of-Firms [ ; if the owner has enough money for paying the initial capital of the new firm set Bank-Account-Household Bank-Account-Household - Initial-liquidity-of-Firms ; update the bank account of the capitalist, reduce the money used to rebuild the firm ask in-owner-neighbors [ ; the owner asks the firm to reset the following variables set Current-Retail-Loans 0 ; reset the parameter if Capital-Destruction? [ set Capital Initial-Capital ] ; reset the capital of the C-Firm, the input applied to the production of C goods set Bank-Account-Firm Initial-liquidity-of-Firms ; updated the bank account with the money from the capitalist ] ] [ ; if the owner does not have enough money for paying the initial capital of the firm with problems... set Bank-Account-Household 0 ; ...the owner pay the debts with all his/her current assets set Worker? true ; the capitalist is broken, and he/she becomes a poor worker set Number-of-Workers Number-of-Workers + 1 set color yellow ; just for fun, not necessary for the model, used only for display in HUD netlogo set Human-Wealth 1 ; initial value for Human Wealth, utilized to calculate the consumption process set Current-Income 0 ; intitial income set Bank-Account-Household Initial-households-personal-assets ; initial value of deposits at the banks, a vital minimum set Desired-Consumption 0 ; initial value for desire consume set Consumption 0 ; initial value for Consumption set C-Firm-List [ ] ; setup for the list which will be used to colect the C-Firms visited set Employed? false ; this worker is unemployed for the moment ask in-owner-neighbors [ ; the owner asks the firm to reset the following variables set Current-Retail-Loans 0 ; reset the parameter... in fact this is unnecesary because the firm will die soon... die ; ... I warned you about it... the C-Firm dies, and all its links set Number-of-C-Firms Number-of-C-Firms - 1 ] ] ] ; end asking the owner end to SubF-Go-Bankruptcy-K-Firms ; this subfunction rules the process for the K-firm bankruptcy set K-Broke K-Broke + 1 ; increase the global parameter which count the broke status set Cases-of-Bankruptcy 0 ; reset the parameter ask out-owner-neighbors [ ; find out who is the owner of this firm... there is only one ifelse Bank-Account-Household >= Initial-liquidity-of-Firms [ ; if the owner has enough money for paying the initial capital of the new firm set Bank-Account-Household Bank-Account-Household - Initial-liquidity-of-Firms ; update the bank account of the capitalist, reduce the money used to rebuild the firm ask in-owner-neighbors [ ; the owner asks the firm to reset these variables set Current-Retail-Loans 0 ; reset the parameter set Bank-Account-Firm Initial-liquidity-of-Firms ; updated the bank account with the money from the capitalist ] ] [ ; if the owner does not have enough money for paying the initial capital of the firm with problems... set Bank-Account-Household 0 ; ...the owner pay the debts with all his/her current assets set Worker? true ; the capitalist is broken, and he/she becomes a poor worker set Number-of-Workers Number-of-Workers + 1 set color yellow ; just for fun, not necessary for the model, used only for display in HUD netlogo set Human-Wealth 1 ; initial value for Human Wealth, utilized to calculate the consumption process set Current-Income 0 ; intitial income set Bank-Account-Household Initial-households-personal-assets ; initial value of deposits at the banks, a vital minimum set Desired-Consumption 0 ; initial value for desire Consumption set Consumption 0 ; initial value for Consumption set C-Firm-List [ ] ; setup for the list which will be used to colect the C-Firms visited set Employed? false ; this worker is unemployed for the moment ask in-owner-neighbors [ ; the owner asks the firm to reset these variables set Current-Retail-Loans 0 ; reset the parameter... in fact this is unnecesary because the K-Firm will die soon... die ; ... I warned you about it... the K-Firm dies, and all its links set Current-Number-of-K-Firms Current-Number-of-K-Firms - 1 ] ] ] ; end asking the owner end to SubF-Ask-for-Credit-to-Central-Bank ; this subfunction is called when the retail bank needs for a loan due to liquidity problems if Own-Reserves / Clients-Accounts-at-the-Bank_1 < RR [ let Needed-Liquidity Clients-Accounts-at-the-Bank_1 * RR - Own-Reserves set Central-Bank-Loans Central-Bank-Loans + Needed-Liquidity ] end ; FUNCTION-CENTRAL-BANK: SETTING INTEREST RATE AND CONDITIONS FOR THE LOANS TO THE RETAIL BANKS to Function-Central-Bank SubF-Set-Interest-Rates ; different interest rates are calculated by the central bank SubF-Set-Macroprudential-Rules ; a set of macroprudential rules included in the Basel III catalogue end to SubF-Set-Interest-Rates set Total-Loans_1 Total-Loans set Total-Loans Total-Loans-Firms + Total-Central-Bank-Loans set inflation_1 inflation ; store the inflation value for use with adaptative functions set inflation ((ln Goods-Price-Level - ln Goods-Price-Level_1) + (ln Capital-Price-Level - ln Capital-Price-Level_1)) ; this approximation with logarithms is good only if the rate is close to zero set P_GDP Productivity-of-labor * Number-of-Workers ; P_GDP is potential GDP, and this is the maximum production, by using all resources (Unemployment = 0) let sensity_inflation Taylor-rule-parameter-for-inflation * (inflation - desired-inflation) ; Taylor-rule-parameter-for-inflation & Desire-inflation-for-the-monetary-authority let sensity_product Taylor-rule-parameter-for-product * (ln GDP - ln P_GDP) ; Taylor-rule-parameter-for-product let sensity_credit Taylor-rule-parameter-for-credit * (ln Total-Loans - ln Total-Loans_1) ; the parameter for the credit component of the Taylor rule if taylor-rule = "conservative" [ set taylor-interest-rate max list 0.01 ( (inflation + natural-interest-rate + sensity_inflation) * (Slow_taylor) + (1 - slow_taylor) * taylor-interest-rate ) ; conservative Taylor rule: inflation (eq 18 of Popoyan et al) ] if taylor-rule = "dual-mandate" [ set taylor-interest-rate max list 0.01 ( (inflation + natural-interest-rate + sensity_inflation + sensity_product) * (Slow_taylor) + (1 - slow_taylor) * taylor-interest-rate ) ; dual mandate Taylor rule: inflation and output gap (eq 30 of Silva or eq 19 of Popoyan et al) ] if taylor-rule = "three-mandate" [ set taylor-interest-rate max list 0.01 ( (inflation + natural-interest-rate + sensity_inflation + sensity_product + sensity_credit) * (Slow_taylor) + (1 - slow_taylor) * taylor-interest-rate ) ; three-mandate Taylor rule: inflation, output gap and credit (eq 20 of Popoyan et al) ] end to SubF-Set-Macroprudential-Rules ; we follow here Popoyan et al (2017), pp. 120-121 and 125-127 ; First, we prepare the global variables needed below set Credit-on-GDP_1 Credit-on-GDP ; we store the value of the previous period set Credit-on-GDP Total-Loans-Firms / GDP ; this is the basic ratio used in the Counter-Cyclical-Capital-Buffer defined in Basel III rules let Credit-on-GDP_bis Total-Client-Loans / GDP ; this is a different way for the same result, and we should see Credit-on-GDP = Credit-on-GDP_bis set Matrix-Basel-Buffer matrix:set-and-report Matrix-Basel-Buffer 0 Mjb Credit-on-GDP ; update the first row of the matrix with information about the explained variable: every (0, Mjb) element is replaced by Credit-on-GDP of the current period set Matrix-Basel-Buffer matrix:set-and-report Matrix-Basel-Buffer 1 Mjb ticks ; update the second row of the matrix with information about the explicative variable: every (1, Mjb) element is replaced by Credit-on-GDP of the previous period set Mjb Mjb + 1 if Mjb > (Time-Window2 - 1) [ set Mjb 0 ] ; move the matrix element to the next position, so the replacements in the matrix are sequential, and the time-window controls how many observations we'll have let A matrix:get-row Matrix-Basel-Buffer 0 ; create an object with the first row (0) of the matrix, which contains current Credit-on-GDP let B matrix:get-row Matrix-Basel-Buffer 1 ; create an object with the second row (1) of the matrix, which contains Credit-on-GDP of the previous period r:put "a" A ; call R and put there the object A r:put "b" B ; call R and put there the object B r:eval "c <- lm(a ~ b)" ; call R and ask to solve the OLS regression with the inputs A and B, lm stands for "linear model". The OLS regression is Credit-on-GDP = a + b * ticks + e let C r:get "c$fitted.values" ; call R and put the fitted values into an object C, which is a list let long-Run-Credit-on-GDP last C ; save the last fitted value as a new variable used in the calculation of the gap set Credit-on-GDP-Gap Credit-on-GDP - long-Run-Credit-on-GDP ; we create the gap variable here... and then we proceeed to the calculation of the capital buffer ; Now we start with the definition of the macroprudential rules and their implications for the available credit of banks ask Banks [ ; this is important because the rules are applied to a macro scale but also to a micro scale, for every bank if Macroprudential-Rules = "basel2" [ ; we have created a chooser called "macroprudential-rules" with several possibilities: basel2, basel31, basel32, basel312 set Available-Credit-Basel2 max (list 0 (Own-Bank-Capital * 12.5 - Clients-Loans-with-the-Bank)) ; available-credit = Own-Bank-Capital * 12.5 - Total-Loans-Firms, the maximum limit minus the current level of loans let Minimum-Capital-Requirement-Basel2 Own-Bank-Capital / (Clients-Loans-with-the-Bank + available-credit-basel2) ; Basel II sets this ratio as 8% as a minimum set Available-Credit-Basel Available-Credit-Basel2 ; Available-Credit-Assenza are the particular constraints of the bank to new loans, and it is combined with Available-Credit-Basel determined by monetary authorities ] if Macroprudential-Rules = "basel3_1" [ let Available-Credit-Basel31a max (list 0 (Own-Bank-Capital * 22.2 - Clients-Loans-with-the-Bank)) ; available-credit = Own-Bank-Capital * 22.2 - Total-Loans-Firms, the maximum limit minus the current level of loans let Minimum-Capital-Requirement-Basel3 Own-Bank-Capital / (Clients-Loans-with-the-Bank + Available-Credit-Basel31a) ; Basel II sets this ratio as 4,5% as a minimum let Available-Credit-Basel31b 0 set Capital-Buffer 0 let Buffer-Add-On 0 if Credit-on-GDP-Gap < 2 [ set Capital-Buffer 0 ; there is no buffer here, and therefore there are no specific constraits on new available-credits. The capital Buffer is a percentage on Total-Loans-Firms. set Buffer-Add-On 0 ; the Capital Buffer is a % of the Total-Loans-Firms not available for firms, this is, for each $ loaned this % must be reserved as a buffer... ] ; end of first case if Credit-on-GDP-Gap <= 10 and Credit-on-GDP-Gap >= 2 [ set Capital-Buffer max (list 0 ((Credit-on-GDP-Gap - 2) * 0.003125)) ; 0.003125 = 0.025 / 8 and from here we have a range of values for the Capital-Buffer... (Total-Loans-Firms + Available-Credit-Basel32) set Available-Credit-Basel31b (Clients-Accounts-at-the-Bank + Own-Bank-Capital + Central-Bank-Loans - Own-Reserves - Clients-Loans-with-the-Bank - Clients-Loans-with-the-Bank * Capital-Buffer) / (1 + Capital-Buffer) ; Deposits-Total includes Own-Bank-Capital set Buffer-Add-On Capital-Buffer * (Clients-Loans-with-the-Bank + Available-Credit-Basel31b) ; the aggregate constraint is (Deposits-Total + Central-Bank-Loans + Own-Capital-Bank - Reserves - Total-Loans-Firms - Buffer-Add-On) = Available-Credit-Basel31b ] ; and aggregate Buffer-Add-On = Capital-Buffer * (Total-Loans-Firms + Available-Credit-Basel31)... if Credit-on-GDP-Gap > 10 [ set Capital-Buffer 0.025 set Available-Credit-Basel31b max (list 0 ((Clients-Accounts-at-the-Bank + Own-Bank-Capital + Central-Bank-Loans - Own-Reserves - Clients-Loans-with-the-Bank - Clients-Loans-with-the-Bank * Capital-Buffer) / (1 + Capital-Buffer))) ; Deposits-Total includes Own-Bank-Capital set Buffer-Add-On Capital-Buffer * (Clients-Loans-with-the-Bank + Available-Credit-Basel31b) ; the aggregate constraint is (Deposits-Total + Total-Central-Bank-Loans + sum (Own-Capital-Bank) - Reserves - Total-Loans-Firms - Buffer-Add-On) = Available-Credit-Basel31b ] ; end of third case let Leverage-Requirement-Basel3 Own-Bank-Capital / Assets ; this is the third ratio of the first macroprudential rule of Basel III, and the ratio has to be equal to or higher than 3% let Available-Credit-Basel31c max (list 0 ((Own-Bank-Capital - 0.03 * Assets) / 0.03)) ; 0.03 = Own-Bank-Capital / (Assets of Banks + Available-Credit-Basel31c) and therefore... set Available-Credit-Basel31 min (list Available-Credit-Basel31a Available-Credit-Basel31b Available-Credit-Basel31c) set Available-Credit-Basel Available-Credit-Basel31 ] if Macroprudential-Rules = "basel3_2" [ let High-Quality-Liquid-Assets (Own-Reserves + Own-Bank-Capital) * 1.75 set Available-Credit-Basel32 (High-Quality-Liquid-Assets - (taylor-interest-rate + annuity-rate) * Central-Bank-Loans - 0.1 * Clients-Accounts-at-the-Bank - 0.25 * Central-Bank-Loans + I-Received + D-Received - 0.5 * Clients-Loans-with-the-Bank) * 2 let Expected-Net-Cash-Outflows (taylor-interest-rate + annuity-rate) * Central-Bank-Loans + 0.1 * Clients-Accounts-at-the-Bank + 0.25 * Central-Bank-Loans - I-Received - D-Received + 0.5 * (Clients-Loans-with-the-Bank + Available-Credit-Basel32) let Liquidity-Coverage-Ratio High-Quality-Liquid-Assets / Expected-Net-Cash-Outflows ; Liquidity-Coverage-Ratio >= 1 set Available-Credit-Basel Available-Credit-Basel32 ] if Macroprudential-Rules = "basel3_12" [ set Available-Credit-Basel min (list Available-Credit-Basel31 Available-Credit-Basel32) ] ] end ; FUNCTION-CALL-STATE to Function-State-Manage-Budget ; the State get taxes, sells PublicDebt to the Central Bank if there is a deficit and buys PublicDebt to the Central Bank if there is a superavit and pays unemployment benefits set State-Budget State-Budget - PublicDebt * (taylor-interest-rate * annuity-rate) ; the unemploymet benefits was substracted from the State Budget when the State paid for it let State-Budget-Balance State-Budget ; we record the budget balance let State-Budget-Balance_1 State-Budget-Balance ; we store the surplus or deficit of this period if State-Budget-Balance < 0 and Do_We_Have_Central-Bank? = true and QEasing? = true [ ; if the Central Bank exists and it buys public debt without limits, all the deficit is converted to government bonds sold to the CB set PublicDebt PublicDebt + abs State-Budget ; new debt is added to the existing set State-Budget 0 ; when the deficit is covered, the State budget is in equilibrium ] ; if the Quantitative Easing is not activated the State Budget cannot be negative (we might consider a constraint of 3% of deficit instead of 0%) if State-Budget-Balance > 0 and PublicDebt > 0 and PublicDebt >= State-Budget-Balance and Do_We_Have_Central-Bank? = true [ ; if the Central Bank exists and there is a surplus... set PublicDebt PublicDebt - State-Budget ; new debt is added to the existing set State-Budget 0 ; when the deficit is covered, the State budget is in equilibrium ] ; end of this case if State-Budget-Balance > 0 and PublicDebt >= 0 and PublicDebt < State-Budget-Balance and Do_We_Have_Central-Bank? = true [ ; if the Central Bank exists and there is a surplus... set State-Budget State-Budget-Balance - PublicDebt ; new debt is added to the existing set PublicDebt 0 ; the public debt is cancelled set Account-of-State-at-Central-Bank Account-of-State-at-Central-Bank + State-Budget ; the surplus goes to the account of the State at the Central Bank, and this reduces the amount of money in the system set State-Budget 0 ; when the surplus is applied, the State budget is in equilibrium ] ; end of this case end to Function-Update-System SubF-Update-Wages SubF-Update-Monetary-Variables SubF-Entry-New-Firms end To SubF-Update-Wages ; this subfunction adjusts wages depending on unempleyment rate, and this wage is applied to the next period set cpi_1 cpi ; store the cpi value for use with adaptative functions... it is a global variable set cpi ln Goods-Price-Level - ln Goods-Price-Level_1 ; cpi is the consumer prince index, user for indexing salaries set Wage-on-GDP_1 Wage-on-GDP ; store the Wage-on-GDP value for use with adaptative functions set Wage-on-GDP (sum [Number-of-Employees] of Firms * Wage) / GDP ; total salaries as a percentage of the GDP, then Wage = (Wage-on-GDP * GDP) / Number-of-Employees is the wage that keeps that proportion constant set Wage_1 Wage ; store the Wage value for use with adaptative functions ifelse Unemployment-Rate <= frictional-unemployment-rate + 3 [ ; if the unemployment rate approaches the frictional unemployment rate (of about 5%), then trade unions get stronger and wages rise set Wage min list ((1 + cpi_1) * Wage) ((Wage-on-GDP_1 * GDP) / sum [Number-of-Employees] of Firms) ; two options: the previous wage increased by the consumer price index or the wage which keeps Wage-on-GDP constant ] [ ; the second option for wage comes from finding the value of wage in (Wage-on-GDP_1 = Wage-on-GDP) set Wage minimum-wage ; if the unemployment rate is higher than the frictional unemployment rate plus a margin, the wages cannot be lower than a legal minimum ] ; trade unions try to keep purchasing power of salaries or weight of salaries on GDP constant, but they loss power if unemployment increases end to SubF-Update-Monetary-Variables set Monetary-Base Total-Central-Bank-Loans + PublicDebt - Account-of-State-at-Central-Bank - Central-Bank-Own-Capital ; monetary base is "outside money", and that difference is "coins and bills" money set Currency Monetary-Base - Total-Reserves ; Currency is Currency, and this plus Total-Reserves is the Monetary-Base set Money-Supply Monetary-Base / RR ; Monetary-Base multiplied by the money multiplier (1/RR) is the Money-Supply end to SubF-Entry-New-Firms ; if bakruptcy of firms occurs, a procedure for regenerating firms is activated let C-Firms-newcomers% 0 ; local variable, a probability following a Beta distribution ifelse GDP > GDP_1 [ set C-Firms-newcomers% stats:beta 6 3 ] [ set C-Firms-newcomers% stats:beta 3 6 ] ; the probability of new firms depends on the GDP growth, and the Beta distribution is asymmetrical if Number-of-C-Firms > Current-Number-of-C-Firms [ ; if the number of C-Firms is lower than the maximun, there is room for newcomers if random-float 1 < C-Firms-newcomers% [ ; with a probability that depends on the GDP growth, new C-Firms appear in the economy create-firms 1 [ move-to one-of patches with [not any? Firms-here] ; if a C-Firm and K-Firm are at the same patch, move the new firm in the setup process set shape "factory" ; just for fun, not necessary for the model, used only for display in HUD netlogo set size 2 ; just for fun, not necessary for the model, used only for display in HUD netlogo set color orange ; just for fun, not necessary for the model, used only for display in HUD netlogo set C-Firm? true ; proper of the Firms, true means it is a consumption producer firm set Owner? false ; this firm will have an owner, but at this moment does not have it set Price random-float 2 ; initial value for price set Capital Initial-capital ; initial value for capital set Stock Initial-production-C-firms ; initial value for stock set Production Initial-production-C-firms ; initial value for production set Revenue 0 ; initial value for revenue set Sales 0 ; initial value for sales set Need-Cash 0 ; initial value for cash needed before production, because lack of liquidity for starting it set Cases-of-Bankruptcy 0 ; the total number of bankruptcies by this firm set Desired-Investment 0 ; initial value for desire investment set Investment 0 ; initial value for investment set Number-of-Employees 0 ; initial value for number of employees set Need-of-Employees 0 ; initial value for desire employees set K-Firm-List [ ] ; setup for the list which will be used to colect the K-Firms visited set Vacancy 0 ; initial value for vacancy set Bank-Account-Firm Initial-liquidity-of-Firms ; initial money deposited at the bank by the firms set Investment-Memory Initial-Capital ; initial value for Investment-Memory, parameter utilized to calculate the desire investment set Util-Capacity 0 ; initial value for util-capacity create-banker-from min-one-of banks [distance myself] [set hidden? true] ; this create a link between the bank and the capitalist set My-Nearest-Bank min-one-of banks [distance myself] ; this bank is the same to which the C-Firms is now linked with a "banker" relationship ] ; end new firm commands ] ; end if random 100 ] ; end condition about room for new firms let Newcapitalist-C n-of 1 Workers with-max [ Bank-Account-Household ] ; the new firm needs a new capitalist-owner ask Newcapitalist-C [ ; we ask the worker with the highest savings to buy the Firm and become a capitalist ask one-of my-in-hireds [ ; the new capitalist is a worker yet and we take its labor contract and... ask other-end [ ; ... at the other end of that contract is a firm set Vacancy Vacancy + 1 ; the worker leaves, so the firm adjust the vacancies set Number-of-Employees Number-of-Employees - 1 ; the firm losses one worker ] die ; the link, the labor relationship, dies ] set shape "person" ; this is unnecessary, because the worker also has a person shape set size 1.25 ; the same goes for the size set color white ; the color changes, because workers are yellow and capitalists are white set Worker? false ; he/she is now a capitalist set Current-Number-of-Workers Current-Number-of-Workers - 1 create-owner-from one-of Firms with [Owner? = false] [set hidden? true] ; this creates a link between the firm and the capitalist ] ; local variable with the total number of K-Firms alive in this period let K-Firms-newcomers% 0 ; local variable, a probability following a Beta distribution ifelse GDP > GDP_1 [ set K-Firms-newcomers% stats:beta 6 3 ] [ set K-Firms-newcomers% stats:beta 3 6 ] ; the probability of new firms appearing depends on the GDP growth, and the Beta distribution is asymmetrical if Number-of-K-Firms > Current-Number-of-K-Firms [ ; if the number of K-Firms is lower than the maximun, there is room for newcomers if random-float 1 < K-Firms-newcomers% [ ; with a probability that depends on the GDP growth, new K-Firms appear in the economy create-firms 1 [ move-to one-of patches with [not any? Firms-here] ; if a C-Firm and K-Firm are at the same patch, move the K-Firm in the setup process set shape "factory" ; just for fun, not necessary for the model, used only for display in HUD netlogo set size 2 ; just for fun, not necessary for the model, used only for display in HUD netlogo set color green ; just for fun, not necessary for the model, used only for display in HUD netlogo set C-Firm? false ; proper of the Firms, true means it is a consumption producer firm set Owner? false ; this firm will have an owner, but at this moment does not have it set Price random-float 2 ; initial value for price set Capital Initial-capital ; initial value for capital set Stock Initial-production-K-firms ; initial value for stock set Production Initial-production-K-firms ; initial value for production set Revenue 0 ; initial value for revenue set Sales 0 ; initial value for sales set Need-Cash 0 ; initial value for cash needed before production, because lack of liquidity for starting it set Cases-of-Bankruptcy 0 ; the total number of bankruptcies by this firm set Desired-Investment 0 ; initial value for desire investment set Investment 0 ; initial value for investment set Number-of-Employees 0 ; initial value for number of employees set Need-of-Employees 0 ; initial value for desire employees set Vacancy 0 ; initial value for vacancy set Bank-Account-Firm Initial-liquidity-of-Firms ; initial money deposited at the bank by the firms set Investment-Memory Initial-Capital ; initial value for Investment-Memory, parameter utilized to calculate the desire investment set Util-Capacity 0 ; initial value for util-capacity create-banker-from min-one-of banks [distance myself] [set hidden? true] ; this create a link between the bank and the capitalist set My-Nearest-Bank min-one-of banks [distance myself] ; this bank is the same to which the C-Firms is now linked with a "banker" relationship ] ; end sprout ] ; end if random 100 ] ; end condition about room for new firms let Newcapitalist-K n-of 1 Workers with-max [ Bank-Account-Household ] ; the new firm needs a new capitalist-owner ask Newcapitalist-K [ ; we ask the worker with the highest savings to buy the Firm and become a capitalist ask one-of my-in-hireds [ ; the new capitalist is a worker yet and we take its labor contract ask other-end [ ; at the other end of that contract is a firm set Vacancy Vacancy + 1 ; the worker leaves, so the firm adjust the vacancies set Number-of-Employees Number-of-Employees - 1 ; the firm losses one worker ] die ; the link, the labor relationship, dies ] set shape "person" ; this is unnecessary, because the worker also has a person shape set size 1.25 ; the same goes for the size set color white ; the color changes, because workers are yellow and capitalists are white set Worker? false ; he/she is now a capitalist set Current-Number-of-Workers Current-Number-of-Workers - 1 create-owner-from one-of Firms with [Owner? = false] [set hidden? true] ; this create a link between the firm and the capitalist ] end
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Rubén Osuna
This model is a beta version!
The model has undetected problems and it does not run yet.
Posted about 7 years ago
Rubén Osuna
Version 2 now runs
The version 2 runs, but the behaviour of the model is not the expected yet.
Posted almost 7 years ago