gemMoney_3_2: A General Equilibrium Model with Money

In GE: General Equilibrium Modeling

A General Equilibrium Model with Money

Description

A general equilibrium model with money as a medium of exchange and a means of payment.

Usage

gemMoney_3_2(
  dstl,
  supply.labor = 100,
  supply.money = 300,
  names.commodity = c("product", "labor", "money"),
  names.agent = c("firm", "household"),
  ...
)

Arguments

dstl	the demand structure tree list.
supply.labor	the supply of labor.
supply.money	the supply of money.
names.commodity	names of commodities.
names.agent	names of agents.
...	arguments to be to be passed to the function sdm2.

Details

A general equilibrium model with 3 commodities (i.e. product, labor, and money) and 2 agents (i.e. a firm and a household). To produce, the firm needs product, labor and money. The household only consumes the product. But money is also needed to buy the product. The household supplies labor and money.

In the calculation results, the price of the currency is the interest per unit of currency (i.e. the rent price, interest price). It should be noted that the unit of currency can be arbitrarily selected. For example, a unit of currency may be two dollars or ten dollars. The interest price divided by the interest rate is the asset price of 1 unit of the currency.

Value

A general equilibrium (see sdm2)

Examples

#### Leontief-type firm
interest.rate <- 0.25

dst.Leontief.firm <- node_new("output",
  type = "FIN", rate = c(1, interest.rate),
  "cc1", "money"
)
node_set(dst.Leontief.firm, "cc1",
  type = "Leontief", a = c(0.6, 0.2),
  "product", "labor"
)

dst.household <- node_new("utility",
  type = "FIN", rate = c(1, interest.rate),
  "product", "money"
)

dstl.Leontief <- list(dst.Leontief.firm, dst.household)

ge.Leontief <- gemMoney_3_2(dstl.Leontief)
ge.Leontief$p

## SCES-type firm
dst.SCES.firm <- Clone(dst.Leontief.firm)
node_set(dst.SCES.firm, "cc1",
  type = "SCES", alpha = 1, beta = c(0.6, 0.2),
  es = 0 # es is the elasticity of substitution.
)

node_plot(dst.SCES.firm, TRUE)

dstl.SCES <- list(dst.SCES.firm, dst.household)

ge.SCES <- gemMoney_3_2(dstl.SCES)
ge.SCES$p
p.money <- ge.SCES$p
p.money["money"] <- p.money["money"] / interest.rate
p.money <- p.money / p.money["money"] # prices in terms of the asset price of the currency
p.money

## The price of money is the interest rate.
## The other prices are in terms of the asset price of the currency.
gemMoney_3_2(dstl.SCES,
             numeraire = c("money" = interest.rate)
)

GE documentation built on Nov. 8, 2023, 9:07 a.m.