' Before running this program you should have run program REFORM (frb_steady_state.txt) ' to create a workfile and a baseline solution! ' This program will generate a scenario for money creation under full-reserve banking through government spending. smpl @all ' Store original values of shocked variables genr b_cb_bar_0 = b_cb_bar genr g_k_0 = g_k ' Increase the money supply and govt spending smpl 0015 @last b_cb_bar = 65 g_k = g_k_0 + 15/p 'Return govt spending to its previous value after one period smpl 0016 @last g_k = g_k_0 smpl @all ' Select the alternative Scenario reform_mod.scenario "Scenario 1" ' Set simulation sample smpl 0003 @last ' Solve the model for the current sample reform_mod.solve(i=p) ' Store new values of shocked variables genr b_cb_bar_1 = b_cb_bar genr g_k_1 = g_k ' Return shocked variables to their original values b_cb_bar = b_cb_bar_0 g_k = g_k_0 ' end of scenario ' Create charts for simulated variables smpl 0001 0050 ' GDP and inflation graph fig_y_k y_k_1 fig_y_k.draw(shade, bottom) 0014 0035 fig_y_k.datelabel format(yy) fig_y_k.addtext(b) Period fig_y_k.addtext(0.05, 0.1, font(b)) "Old" steady state fig_y_k.addtext(2, 0.1, font(b)) Transition fig_y_k.addtext(3.6, 0.1, font(b)) "New" steady state fig_y_k.addtext(t,just(c),just(c), font(14)) Real GDP show fig_y_k graph fig_pi pi_1 fig_pi.axis(left) units(p) fig_pi.addtext(-0.2, -0.3) % fig_pi.draw(shade, bottom) 0014 0035 fig_pi.datelabel format(yy) fig_pi.addtext(b) Period fig_pi.addtext(0.05, 0.1, font(b)) "Old" steady state fig_pi.addtext(2, 0.1, font(b)) Transition fig_pi.addtext(3.6, 0.1, font(b)) "New" steady state fig_pi.addtext(t,just(c),just(c), font(14)) Inflation rate show fig_pi ' Demand deposits, time deposits and loans graph fig_m1_h m1_h_1 fig_m1_h.draw(shade, bottom) 0014 0035 fig_m1_h.datelabel format(yy) fig_m1_h.addtext(b) Period fig_m1_h.addtext(0.05, 0.1, font(b)) "Old" steady state fig_m1_h.addtext(2, 0.1, font(b)) Transition fig_m1_h.addtext(3.6, 0.1, font(b)) "New" steady state fig_m1_h.addtext(t,just(c),just(c), font(14)) Demand deposits show fig_m1_h graph fig_m2_h m2_h_1 fig_m2_h.draw(shade, bottom) 0014 0035 fig_m2_h.datelabel format(yy) fig_m2_h.addtext(b) Period fig_m2_h.addtext(0.05, 0.1, font(b)) "Old" steady state fig_m2_h.addtext(2, 0.1, font(b)) Transition fig_m2_h.addtext(3.6, 0.1, font(b)) "New" steady state fig_m2_h.addtext(t,just(c),just(c), font(14)) Time deposits show fig_m2_h graph fig_l_s l_s_1 fig_l_s.draw(shade, bottom) 0014 0035 fig_l_s.datelabel format(yy) fig_l_s.addtext(b) Period fig_l_s.addtext(0.05, 0.1, font(b)) "Old" steady state fig_l_s.addtext(2, 0.1, font(b)) Transition fig_l_s.addtext(3.6, 0.1, font(b)) "New" steady state fig_l_s.addtext(t,just(c),just(c), font(14)) Loans show fig_l_s ' Bank liquidity and deposit and loan rates graph fig_blr blr_1 1.1 1.2 fig_blr.options linepat fig_blr.setelem(2) lpat(dash1) fig_blr.setelem(3) lpat(dash1) fig_blr.draw(shade, bottom) 0014 0035 fig_blr.datelabel format(yy) fig_blr.addtext(b) Period fig_blr.addtext(0.05, 0.1, font(b)) "Old" steady state fig_blr.addtext(2, 0.1, font(b)) Transition fig_blr.addtext(3.6, 0.1, font(b)) "New" steady state fig_blr.addtext(t,just(c),just(c), font(14)) Bank liquidity ratio show fig_blr graph fig_r_m r_m_1 fig_r_m.axis(left) units(p) fig_r_m.addtext(-0.3, -0.3) % fig_r_m.draw(shade, bottom) 0014 0035 fig_r_m.datelabel format(yy) fig_r_m.addtext(b) Period fig_r_m.addtext(0.05, 1.5, font(b)) "Old" steady state fig_r_m.addtext(2, 1.5, font(b)) Transition fig_r_m.addtext(3.6, 1.5, font(b)) "New" steady state fig_r_m.addtext(t,just(c),just(c), font(14)) Interest rate on time deposits show fig_r_m graph fig_r_l r_l_1 fig_r_l.axis(left) units(p) fig_r_l.addtext(-0.3, -0.3) % fig_r_l.draw(shade, bottom) 0014 0035 fig_r_l.datelabel format(yy) fig_r_l.addtext(b) Period fig_r_l.addtext(0.05, 0.1, font(b)) "Old" steady state fig_r_l.addtext(2, 0.1, font(b)) Transition fig_r_l.addtext(3.6, 0.1, font(b)) "New" steady state fig_r_l.addtext(t,just(c),just(c), font(14)) Interest rate on loans show fig_r_l ' Bills held by hh and psbr graph fig_b_hh b_hh_1 fig_b_hh.draw(shade, bottom) 0014 0035 fig_b_hh.datelabel format(yy) fig_b_hh.addtext(b) Period fig_b_hh.addtext(0.05, 2.8, font(b)) "Old" steady state fig_b_hh.addtext(2, 2.8, font(b)) Transition fig_b_hh.addtext(3.6, 2.8, font(b)) "New" steady state fig_b_hh.addtext(t,just(c),just(c), font(14)) Government bills held by households show fig_b_hh graph fig_r_b r_b_1 fig_r_b.axis(left) units(p) fig_r_b.addtext(-0.25, -0.3) % fig_r_b.draw(shade, bottom) 0014 0035 fig_r_b.datelabel format(yy) fig_r_b.addtext(b) Period fig_r_b.addtext(0.05, 2.8, font(b)) "Old" steady state fig_r_b.addtext(2, 2.8, font(b)) Transition fig_r_b.addtext(3.6, 2.8, font(b)) "New" steady state fig_r_b.addtext(t,just(c),just(c), font(14)) Interest rate on government bills (base rate) show fig_r_b graph fig_psbr psbr_1 fig_psbr.draw(shade, bottom) 0014 0035 fig_psbr.datelabel format(yy) fig_psbr.addtext(b) Period fig_psbr.addtext(0.05, 0.1, font(b)) "Old" steady state fig_psbr.addtext(2, 0.1, font(b)) Transition fig_psbr.addtext(3.6, 0.1, font(b)) "New" steady state fig_psbr.addtext(t,just(c),just(c), font(14)) Government budget deficit show fig_psbr ' Private wealth graph fig_v v_1 fig_v.draw(shade, bottom) 0014 0035 fig_v.datelabel format(yy) fig_v.addtext(b) Period fig_v.addtext(0.05, 0.1, font(b)) "Old" steady state fig_v.addtext(2, 0.1, font(b)) Transition fig_v.addtext(3.6, 0.1, font(b)) "New" steady state fig_v.addtext(t,just(c),just(c), font(14)) Wealth of households show fig_v graph fig_d_v d(v_1) fig_d_v.draw(shade, bottom) 0014 0035 show fig_d_v graph fig_bl_value bl_h_1*p_bl_1 fig_bl_value.draw(shade, bottom) 0014 0035 show fig_bl_value ' Public debt graph fig_gd gd_1 gd_net_1 fig_gd.draw(shade, bottom) 0014 0035 show fig_gd graph fig_gd_per_y gd_1/y_1 gd_net_1/y_1 fig_gd_per_y.name(1) Gross government debt fig_gd_per_y.name(2) Consolidated government debt fig_gd_per_y.options linepat fig_gd_per_y.setelem(2) lpat(dash2) fig_gd_per_y.axis(left) units(p) fig_gd_per_y.addtext(-0.4, -0.3) % of GDP fig_gd_per_y.draw(shade, bottom) 0014 0035 fig_gd_per_y.datelabel format(yy) fig_gd_per_y.addtext(b) Period fig_gd_per_y.addtext(0.05, 0.1, font(b)) "Old" steady state fig_gd_per_y.addtext(2, 0.1, font(b)) Transition fig_gd_per_y.addtext(3.6, 0.1, font(b)) "New" steady state fig_gd_per_y.addtext(t,just(c),just(c), font(14)) Government debt show fig_gd_per_y