GE (version 0.3.4)

demCreditPolicy: A Disequilibrium Model with Credit

Description

This is an example to illustrate that credit policies may lead to business cycles. When the firm's profit rate is high, the laborer lends labor or labor income to the firm; when the firm's profit rate is low, the firm repays the loan with products.

Usage

demCreditPolicy(...)

Arguments

...

arguments to be passed to the function sdm2.

Examples

# \donttest{
dst.firm <- node_new("output",
  type = "CD", alpha = 1.2,
  beta = c(0.5, 0.5),
  "prod", "lab"
)

dst.consumer <- node_new("utility",
  type = "Leontief", a = 1,
  "prod"
)

f <- function(policy = NULL) {
  ge <- sdm2(
    A = list(dst.firm, dst.consumer),
    B = matrix(c(
      1, 0,
      0, 1
    ), 2, 2, TRUE),
    S0Exg = matrix(c(
      NA, NA,
      NA, 100
    ), 2, 2, TRUE),
    names.commodity = c("prod", "lab"),
    names.agent = c("firm", "consumer"),
    ts = TRUE,
    policy = policy,
    numberOfPeriods = 200,
    maxIteration = 1,
    priceAdjustmentVelocity = 0.05
  )

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

## no credit policy
f()

## credit policy
policy.credit <- function(time, state) {
  profit.rate <- state$p[1] / sum(state$last.A[, 1] * state$p) - 1

  if (profit.rate > 0.01) {
    state$S[2, 2] <- 50
    state$S[2, 1] <- 50
  } else if (profit.rate < -0.01) {
    state$S[1, 2] <- state$S[1, 1] * 0.5
    state$S[1, 1] <- state$S[1, 1] * 0.5
  } else {
    state$S[2, 2] <- 100
    state$S[2, 1] <- 0
  }

  state
}

f(policy = policy.credit)

# }