' Twentieth Experiment: A global economic crisis without domestic fiscal stimulus
' Before running this program, run first REEs_mod so as to create a workfile and a baseline solution
' This program generates Graphs EXP-20.A to EXP-20.I discussed in the Appendix
' Generates a global economic crisis w/o domestic fiscal stimulus (orthodox response) (orthodox response)
smpl @all
' Store original value of shocked parameter to baseline
genr gr_y_row_0 = gr_y_row
' Increase the propensity to consume out of income
smpl 2009 2009
gr_y_row = -0.02
smpl 2010 2010
gr_y_row = 0.015
smpl 2011 2011
gr_y_row = 0.015
smpl 2012 2012
gr_y_row = 0.02
smpl 2013 2013
gr_y_row = 0.025
smpl @all
' Select the second alternative Scenario 20
REEs_mod.scenario(n, a="_20") "Scenario 20"
' Set simulation sample
smpl 1947 @last
' Solve the model for the current sample
REEs_mod.solve(i=p)
' Store shocked value to scenario
genr gr_y_row_20 = gr_y_row
' and get back shocked variable to its baseline value
gr_y_row = gr_y_row_0
' Creates charts from simulated variables
' Creates the chart in Graph EXP-20.A
smpl 1955 2050
graph exp20a.line ((w_20-w_0)/w_0)*100 (((w_20/pd_20)-(w_0/pd_0))/(w_0/pd_0))*100 ((pd_20-pd_0)/pd_0)*100
exp20a.options linepat
exp20a.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp20a.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp20a.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp20a.name(1) Effect upon nominal wages
exp20a.name(2) Effect upon real wages
exp20a.name(3) Effect upon prices
exp20a.addtext(t,just(c),just(c)) Graph III.4.39: Effect upon real wage rate, following a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20a
' Creates the chart in Graph EXP-20.B
smpl 1955 2050
graph exp20b.line (i_k_20/i_k_0-1)*100 (y_k_20/y_k_0-1)*100 (c_k_20/c_k_0-1)*100
exp20b.options linepat
exp20b.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp20b.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp20b.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp20b.name(1) Real fixed investment
exp20b.name(2) Real output
exp20b.name(3) Real consumption
exp20b.addtext(t,just(c),just(c)) Graph 20.B: Evolution of consumption, investment and output, following a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20b
' Creates the chart in Graph EXP-20.C
smpl 1955 2050
graph exp20c.line (x_k_20/x_k_0-1)*100 (y_k_20/y_k_0-1)*100 (m_k_20/m_k_0-1)*100
exp20c.options linepat
exp20c.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp20c.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp20c.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp20c.name(1) Real exports
exp20c.name(2) Real output
exp20c.name(3) Real imports
exp20c.addtext(t,just(c),just(c)) Graph 20.C: Evolution of exports, imports and output, following a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20c
' Creates the chart in Graph EXP-20.D
smpl 1955 2050
graph exp20d.line ((psbr_20/y_20)-(psbr_0/y_0))*100 ((ca_row_20/y_20)-(ca_row_0/y_0))*100
exp20d.options linepat
exp20d.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp20d.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp20d.name(1) PSBR (Government surplus)
exp20d.name(2) Current Account
exp20d.addtext(t,just(c),just(c)) Graph III.4.43: Evolution of government surplus and current account to GDP ratios, following a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20d
' Creates the chart in Graph EXP-20.E
smpl 1955 2050
graph exp20e.line (nirr_20-nirr_0)*12
exp20e.options linepat
exp20e.setelem(1) lcolor(green) lwidth(2) lpat(2)
exp20e.name(1) Effect upon net international reserve ratio
exp20e.addtext(t,just(c),just(c)) Graph III.4.41: Change in net international reserves ratio, following a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20e
' Creates the chart in Graph EXP-20.F
smpl 1955 2050
graph exp20f.line 101 (er_20-er_0+1)*100 99
exp20f.options linepat
exp20f.setelem(1) lcolor(black) lwidth(2) lpat(2)
exp20f.setelem(2) lcolor(green) lwidth(2) lpat(1)
exp20f.setelem(3) lcolor(black) lwidth(2) lpat(2)
exp20f.name(1) Inflationary pressure threshold
exp20f.name(2) Employment rate
exp20f.name(3) Deflationary pressure threshold
exp20f.addtext(t,just(c),just(c)) Graph III.4.37: Evolution of employment rate, following a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20f
' Creates the chart in Graph EXP-20.G
smpl 1955 2050
graph exp20g.line (td_20/y_20-td_0/y_0)*100 (bcbs_20/y_20-bcbs_0/y_0)*100 (gdh_g_20/y_20-gdh_g_0/y_0)*100
exp20g.options linepat
exp20g.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp20g.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp20g.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp20g.name(1) Total Government debt
exp20g.name(2) Central Bank bills
exp20g.name(3) Government deposits at Central Bank
exp20g.addtext(t,just(c),just(c)) Graph III.4.45: Evolution of government debt, central bank bills, and government deposits at CB, following a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20g
' Creates the chart in Graph EXP-20.H
smpl 1955 2050
graph exp20h.line ((c_k_20-c_k_0)/y_k_0)*100 ((i_k_20-i_k_0)/y_k_0)*100 ((g_k_20-g_k_0)/y_k_0)*100 ((x_k_20-x_k_0)/y_k_0)*100 -((m_k_20-m_k_0)/y_k_0)*100 ((y_k_20-y_k_0)/y_k_0)*100
exp20h.options linepat
exp20h.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp20h.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp20h.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp20h.setelem(4) lcolor(black) lwidth(2) lpat(4)
exp20h.setelem(5) lcolor(yellow) lwidth(2) lpat(5)
exp20h.setelem(6) lcolor(orange) lwidth(2) lpat(6)
exp20h.name(1) Real consumption
exp20h.name(2) Real investment
exp20h.name(3) Real government expenditure
exp20h.name(4) Real exports
exp20h.name(5) Real imports
exp20h.name(6) Real GDP
exp20h.addtext(t,just(c),just(c)) Graph III.4.35: Contribution to real GDP growth of a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20h
' Creates the chart in Graph EXP-20.I
smpl 1955 2050
graph exp20i.line (((w_20/pr_20)-(w_0/pr_0))/(w_0/pr_0))*100 ((pd_20-pd_0)/pd_0)*100
exp20i.options linepat
exp20i.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp20i.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp20i.name(1) Effect upon wage to productivity ratio
exp20i.name(2) Effect upon prices
exp20i.addtext(t,just(c),just(c)) Graph 20.I: Inflationary effect, following a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20i
' Creates the chart in Graph EXP-20.J
smpl 1955 2050
graph exp20j.line (xrendog_20/xrendog_0-1)*100
exp20j.options linepat
exp20j.setelem(1) lcolor(green) lwidth(2) lpat(2)
exp20j.name(1) Effect upon shadow exchange rate
exp20j.addtext(t,just(c),just(c)) Graph 20.J: Hypothetical effect upon shadow exchange rate (exchange rate that would prevail if market-determined), following a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20j
' Creates the chart in Graph EXP-20.K
smpl 1955 2050
graph exp20k.line ((ydr_h_k_e_20-ydr_h_k_e_0)/ydr_h_k_e_0)*100 ((v_h_k_20-v_h_k_0)/v_h_k_0)*100
exp20k.options linepat
exp20k.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp20k.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp20k.name(1) Real effect upon regular disposable income
exp20k.name(2) Real effect upon households’ wealth
exp20k.addtext(t,just(c),just(c)) Graph 20.K: Real (income and wealth) effects upon consumption, following a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20k
' Creates the chart in Graph EXP-20.L
smpl 1955 2050
graph exp20l.line (((cg_h_20/pd_20)-(cg_h_0/pd_0))/(cg_h_0/pd_0))*100
exp20l.options linepat
exp20l.setelem(1) lcolor(green) lwidth(2) lpat(2)
exp20l.name(1) Real effect upon capital gains of households
exp20l.addtext(t,just(c),just(c)) Graph 20.L: Real effect upon capital gains, following a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20l
' Creates the chart in Graph EXP-20.O
smpl 1955 2050
graph exp20o.line rm_20-rm_0 rbg_20-rbg_0 rbb_20-rbb_0 rbf_20-rbf_0 rl_20-rl_0 rlcb_20-rlcb_0
exp20o.options linepat
exp20o.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp20o.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp20o.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp20o.setelem(4) lcolor(black) lwidth(2) lpat(4)
exp20o.setelem(5) lcolor(yellow) lwidth(2) lpat(5)
exp20o.setelem(6) lcolor(orange) lwidth(2) lpat(6)
exp20o.name(1) Effect upon deposit rate
exp20o.name(2) Effect upon T-Bills rate
exp20o.name(3) Effect upon Bank CDs rate
exp20o.name(4) Effect upon Corporate-Bills (Commercial paper) rate
exp20o.name(5) Effect upon Loans rate
exp20o.name(6) Effect upon Discount rate
exp20o.addtext(t,just(c),just(c)) Graph 20.O: Effect upon short-term rates, following a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20o
' Creates the chart in Graph EXP-20.P
smpl 1955 2050
graph exp20p.line rblg_20-rblg_0 rblf_20-rblf_0 rk_20-rk_0 fcrblg_20-fcrblg_0
exp20p.options linepat
exp20p.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp20p.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp20p.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp20p.setelem(4) lcolor(black) lwidth(2) lpat(4)
exp20p.setelem(5) lcolor(yellow) lwidth(2) lpat(5)
exp20p.name(1) Effect upon T-Bonds rate
exp20p.name(2) Effect upon Corporate-Bonds rate
exp20p.name(3) Effect upon Corporate Dividens yield
exp20p.name(4) Effect upon Sovereign Bonds rate
exp20p.name(5) Effect upon Loans rate
exp20p.addtext(t,just(c),just(c)) Graph 20.P: Effect upon long-term rates, following a global economic crisis w/o domestic fiscal stimulus (orthodox response)
show exp20p