' Twenty first Experiment: A global economic crisis with 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-21.A to EXP-21.I discussed in the Appendix
' Generates a global economic crisis with domestic fiscal stimulus (Keynesian response)
smpl @all
' Store original value of shocked parameter to baseline
genr gr_y_row_0 = gr_y_row
genr gr_g_natural_0 = gr_g_natural
' Increase the propensity to consume out of income
smpl 2009 2009
gr_y_row = -0.02
smpl 2010 2010
gr_y_row = 0.015
gr_g_natural = 0.175
smpl 2011 2011
gr_y_row = 0.015
gr_g_natural = 0.04
smpl 2012 2012
gr_y_row = 0.02
smpl 2013 2013
gr_y_row = 0.025
smpl @all
' Select the second alternative Scenario 21
REEs_mod.scenario(n, a="_21") "Scenario 21"
' 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_21 = gr_y_row
genr gr_g_natural_21 = gr_g_natural
' and get back shocked variable to its baseline value
gr_y_row = gr_y_row_0
gr_g_natural = gr_g_natural_0
' Creates charts from simulated variables
' Creates the chart in Graph EXP-21.A
smpl 1955 2050
graph exp21a.line ((w_21-w_0)/w_0)*100 (((w_21/pd_21)-(w_0/pd_0))/(w_0/pd_0))*100 ((pd_21-pd_0)/pd_0)*100
exp21a.options linepat
exp21a.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp21a.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp21a.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp21a.name(1) Effect upon nominal wages
exp21a.name(2) Effect upon real wages
exp21a.name(3) Effect upon prices
exp21a.addtext(t,just(c),just(c)) Graph III.4.40: Effect upon real wage rate, following a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21a
' Creates the chart in Graph EXP-21.B
smpl 1955 2050
graph exp21b.line (i_k_21/i_k_0-1)*100 (y_k_21/y_k_0-1)*100 (c_k_21/c_k_0-1)*100
exp21b.options linepat
exp21b.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp21b.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp21b.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp21b.name(1) Real fixed investment
exp21b.name(2) Real output
exp21b.name(3) Real consumption
exp21b.addtext(t,just(c),just(c)) Graph 21.B: Evolution of consumption, investment and output, following a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21b
' Creates the chart in Graph EXP-21.C
smpl 1955 2050
graph exp21c.line (x_k_21/x_k_0-1)*100 (y_k_21/y_k_0-1)*100 (m_k_21/m_k_0-1)*100
exp21c.options linepat
exp21c.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp21c.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp21c.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp21c.name(1) Real exports
exp21c.name(2) Real output
exp21c.name(3) Real imports
exp21c.addtext(t,just(c),just(c)) Graph 21.C: Evolution of exports, imports and output, following a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21c
' Creates the chart in Graph EXP-21.D
smpl 1955 2050
graph exp21d.line ((psbr_21/y_21)-(psbr_0/y_0))*100 ((ca_row_21/y_21)-(ca_row_0/y_0))*100
exp21d.options linepat
exp21d.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp21d.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp21d.name(1) PSBR (Government surplus)
exp21d.name(2) Current Account
exp21d.addtext(t,just(c),just(c)) Graph III.4.44: Evolution of government surplus and current account to GDP ratios, following a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21d
' Creates the chart in Graph EXP-21.E
smpl 1955 2050
graph exp21e.line (nirr_21-nirr_0)*12
exp21e.options linepat
exp21e.setelem(1) lcolor(green) lwidth(2) lpat(2)
exp21e.name(1) Effect upon net international reserve ratio
exp21e.addtext(t,just(c),just(c)) Graph III.4.42: Change in net international reserves ratio, following a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21e
' Creates the chart in Graph EXP-21.F
smpl 1955 2050
graph exp21f.line 101 (er_21-er_0+1)*100 99
exp21f.options linepat
exp21f.setelem(1) lcolor(black) lwidth(2) lpat(2)
exp21f.setelem(2) lcolor(green) lwidth(2) lpat(1)
exp21f.setelem(3) lcolor(black) lwidth(2) lpat(2)
exp21f.name(1) Inflationary pressure threshold
exp21f.name(2) Employment rate
exp21f.name(3) Deflationary pressure threshold
exp21f.addtext(t,just(c),just(c)) Graph III.4.38: Evolution of employment rate, following a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21f
' Creates the chart in Graph EXP-21.G
smpl 1955 2050
graph exp21g.line (td_21/y_21-td_0/y_0)*100 (bcbs_21/y_21-bcbs_0/y_0)*100 (gdh_g_21/y_21-gdh_g_0/y_0)*100
exp21g.options linepat
exp21g.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp21g.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp21g.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp21g.name(1) Total Government debt
exp21g.name(2) Central Bank bills
exp21g.name(3) Government deposits at Central Bank
exp21g.addtext(t,just(c),just(c)) Graph III.4.46: Evolution of government debt, central bank bills, and government deposits at CB, following a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21g
' Creates the chart in Graph EXP-21.H
smpl 1955 2050
graph exp21h.line ((c_k_21-c_k_0)/y_k_0)*100 ((i_k_21-i_k_0)/y_k_0)*100 ((g_k_21-g_k_0)/y_k_0)*100 ((x_k_21-x_k_0)/y_k_0)*100 -((m_k_21-m_k_0)/y_k_0)*100 ((y_k_21-y_k_0)/y_k_0)*100
exp21h.options linepat
exp21h.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp21h.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp21h.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp21h.setelem(4) lcolor(black) lwidth(2) lpat(4)
exp21h.setelem(5) lcolor(yellow) lwidth(2) lpat(5)
exp21h.setelem(6) lcolor(orange) lwidth(2) lpat(6)
exp21h.name(1) Real consumption
exp21h.name(2) Real investment
exp21h.name(3) Real government expenditure
exp21h.name(4) Real exports
exp21h.name(5) Real imports
exp21h.name(6) Real GDP
exp21h.addtext(t,just(c),just(c)) Graph III.4.36: Contribution to real GDP growth of a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21h
' Creates the chart in Graph EXP-21.I
smpl 1955 2050
graph exp21i.line (((w_21/pr_21)-(w_0/pr_0))/(w_0/pr_0))*100 ((pd_21-pd_0)/pd_0)*100
exp21i.options linepat
exp21i.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp21i.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp21i.name(1) Effect upon wage to productivity ratio
exp21i.name(2) Effect upon prices
exp21i.addtext(t,just(c),just(c)) Graph 21.I: Inflationary effect, following a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21i
' Creates the chart in Graph EXP-21.J
smpl 1955 2050
graph exp21j.line (xrendog_21/xrendog_0-1)*100
exp21j.options linepat
exp21j.setelem(1) lcolor(green) lwidth(2) lpat(2)
exp21j.name(1) Effect upon shadow exchange rate
exp21j.addtext(t,just(c),just(c)) Graph 21.J: Hypothetical effect upon shadow exchange rate (exchange rate that would prevail if market-determined), following a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21j
' Creates the chart in Graph EXP-21.K
smpl 1955 2050
graph exp21k.line ((ydr_h_k_e_21-ydr_h_k_e_0)/ydr_h_k_e_0)*100 ((v_h_k_21-v_h_k_0)/v_h_k_0)*100
exp21k.options linepat
exp21k.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp21k.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp21k.name(1) Real effect upon regular disposable income
exp21k.name(2) Real effect upon households’ wealth
exp21k.addtext(t,just(c),just(c)) Graph 21.K: Real (income and wealth) effects upon consumption, following a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21k
' Creates the chart in Graph EXP-21.L
smpl 1955 2050
graph exp21l.line (((cg_h_21/pd_21)-(cg_h_0/pd_0))/(cg_h_0/pd_0))*100
exp21l.options linepat
exp21l.setelem(1) lcolor(green) lwidth(2) lpat(2)
exp21l.name(1) Real effect upon capital gains of households
exp21l.addtext(t,just(c),just(c)) Graph 21.L: Real effect upon capital gains, following a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21l
' Creates the chart in Graph EXP-21.O
smpl 1955 2050
graph exp21o.line rm_21-rm_0 rbg_21-rbg_0 rbb_21-rbb_0 rbf_21-rbf_0 rl_21-rl_0 rlcb_21-rlcb_0
exp21o.options linepat
exp21o.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp21o.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp21o.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp21o.setelem(4) lcolor(black) lwidth(2) lpat(4)
exp21o.setelem(5) lcolor(yellow) lwidth(2) lpat(5)
exp21o.setelem(6) lcolor(orange) lwidth(2) lpat(6)
exp21o.name(1) Effect upon deposit rate
exp21o.name(2) Effect upon T-Bills rate
exp21o.name(3) Effect upon Bank CDs rate
exp21o.name(4) Effect upon Corporate-Bills (Commercial paper) rate
exp21o.name(5) Effect upon Loans rate
exp21o.name(6) Effect upon Discount rate
exp21o.addtext(t,just(c),just(c)) Graph 21.O: Effect upon short-term rates, following a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21o
' Creates the chart in Graph EXP-21.P
smpl 1955 2050
graph exp21p.line rblg_21-rblg_0 rblf_21-rblf_0 rk_21-rk_0 fcrblg_21-fcrblg_0
exp21p.options linepat
exp21p.setelem(1) lcolor(blue) lwidth(2) lpat(1)
exp21p.setelem(2) lcolor(green) lwidth(2) lpat(2)
exp21p.setelem(3) lcolor(red) lwidth(2) lpat(3)
exp21p.setelem(4) lcolor(black) lwidth(2) lpat(4)
exp21p.setelem(5) lcolor(yellow) lwidth(2) lpat(5)
exp21p.name(1) Effect upon T-Bonds rate
exp21p.name(2) Effect upon Corporate-Bonds rate
exp21p.name(3) Effect upon Corporate Dividens yield
exp21p.name(4) Effect upon Sovereign Bonds rate
exp21p.name(5) Effect upon Loans rate
exp21p.addtext(t,just(c),just(c)) Graph 21.P: Effect upon long-term rates, following a global economic crisis with domestic fiscal stimulus (Keynesian response)
show exp21p