gemMoney_3_2 {GE}

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 rental 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 rental 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
vm <- 1 # the velocity of money

dst.Leontief.firm <- node_new("output",
  type = "FIN", rate = c(1, interest.rate / vm),
  "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 / vm),
  "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)
)