gemTwoCountryForeignExchangeRate_6_6 {GE}

Example 7.6 (Foreign Exchange Rate) in Li (2019)

Description

This is Example 7.6 in Li (2019), which illustrates foreign exchange rates.

Usage

gemTwoCountryForeignExchangeRate_6_6(...)

Arguments

...

arguments to be passed to the function sdm2.

Examples

dst.firm1 <- node_new("output",
  type = "FIN", rate = c(1, interest.rate = 0.1),
  "cc1", "money1"
)
node_set(dst.firm1, "cc1",
  type = "CD", alpha = 1,
  beta = c(0.5, 0.5),
  "iron", "lab1"
)

dst.firm2 <- Clone(dst.firm1)
node_replace(dst.firm2, "money1", "money2")
node_replace(dst.firm2, "lab1", "lab2")
node_plot(dst.firm2)

dst.laborer1 <- node_new("util",
  type = "FIN", rate = c(1, interest.rate = 0.1),
  "cc1", "money1"
)
node_set(dst.laborer1, "cc1",
  type = "Leontief", a = 1,
  "wheat"
)

dst.moneyOwner1 <- Clone(dst.laborer1)

dst.laborer2 <- Clone(dst.laborer1)
node_replace(dst.laborer2, "money1", "money2")

dst.moneyOwner2 <- Clone(dst.laborer2)

ge <- sdm2(
  A = list(
    dst.firm1, dst.laborer1, dst.moneyOwner1,
    dst.firm2, dst.laborer2, dst.moneyOwner2
  ),
  B = diag(c(1, 0, 0, 1, 0, 0)),
  S0Exg = {
    tmp <- matrix(NA, 6, 6)
    tmp[2, 2] <- 100
    tmp[3, 3] <- 600
    tmp[5, 5] <- 100
    tmp[6, 6] <- 100
    tmp
  },
  names.commodity = c(
    "wheat", "lab1", "money1",
    "iron", "lab2", "money2"
  ),
  names.agent = c(
    "firm1", "laborer1", "moneyOwner1",
    "firm2", "laborer2", "moneyOwner2"
  ),
  numeraire = c("money1" = 0.1) # interest.rate
)

ge$p[6] / ge$p[3] # foreign exchange rate