demInsufficientEffectiveDemand_3_3 {GE}

A Disequilibrium Model Illustrating Insufficient Effective Demand (Supply-demand Structural Mismatch)

Description

A disequilibrium model illustrating supply-demand structural mismatch and insufficient effective demand. Assume that from the 5th period, the producer expects the sales rate of products to decline, so he reduces investment in production and increases the demand for value storage means (such as foreign assets, gold, etc.); the laborer expects the unemployment rate to rise, so he reduces consumption and increases the demand for value storage means.

Here the supplier of value storage means is referred to as ROW (the rest of the world).

Usage

demInsufficientEffectiveDemand_3_3(...)

Arguments

...

arguments to be passed to the function sdm2.

Examples

dst.firm <- node_new("output",
  type = "FIN", rate = c(1, 0),
  "cc1", "store of value"
)
node_set(dst.firm, "cc1",
  type = "CD", alpha = 2,
  beta = c(0.5, 0.5),
  "prod", "lab"
)

dst.laborer <- node_new("util",
  type = "FIN", rate = c(1, 0),
  "cc1", "store of value"
)
node_set(dst.laborer, "cc1",
  type = "CD", alpha = 1,
  beta = c(0.5, 0.5),
  "prod", "lab"
)

dst.ROW <- node_new("util",
  type = "Leontief", a = 1,
  "lab"
)

policy.demand <- function(time, A, state) {
  if (time >= 5) {
    A[[1]]$rate <- c(1, 0.25)
    A[[2]]$rate <- c(1, 0.25)
  } else {
    A[[1]]$rate <- c(1, 0)
    A[[2]]$rate <- c(1, 0)
  }

  state
}

ge <- sdm2(
  A = list(dst.firm, dst.laborer, dst.ROW),
  B = matrix(c(
    1, 0, 0,
    0, 0, 0,
    0, 0, 0
  ), 3, 3, TRUE),
  S0Exg = matrix(c(
    NA, NA, NA,
    NA, 100, NA,
    NA, NA, 100
  ), 3, 3, TRUE),
  names.commodity = c("prod", "lab", "store of value"),
  names.agent = c("firm", "laborer", "ROW"),
  ts = TRUE,
  policy = policy.demand,
  numberOfPeriods = 100,
  maxIteration = 1,
  numeraire = "prod",
  z0 = c(100, 0, 0),
  p0 = c(1, 1, 1),
  pExg = c(1, NA, 1)
)

matplot(ge$ts.z, type = "o", pch = 20)
matplot(ge$ts.p, type = "o", pch = 20)
matplot(ge$ts.q, type = "o", pch = 20)