Vertical Component

System Beginning & Experiments:

Real-World Data Integration:

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Part of

Model Development

ModelSIM is the simplest sectoral flow model of a government, non-government monetary system described by the late, great, Wynne Godley & Marc Lavoie in their book 'Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth'.

Computational (Agent-Based) ModelSIM

Agent-based ModelSIM is an interpretation of Godley & Lavoie's ModelSIM. Agent-based ModelSIM will solve computationally; not as systems of equations. The model must remain consistent with stock-flow accounting. Sectoral agents (best described as partially understood metaphors) are bound by monetary system flows.

Policy variables are government expenditure (a stimulus quantity) and a government mandated taxation rate (a percentage). Change in both expenditure and taxation determine the quantity of money (net financial assets) that flow towards or away from the non-government sector. This is the government sector fiscal balance, either in surplus (a money flow away from the non-government sector), or more typically, in deficit (a money flow toward the non-government sector).

The model and therefore the economy is defined by key policy variables and the behaviour agents.

View model accounting.

Computational (Agent-Based) ModelPC

ModelPC (portfolio choice) combines the circular flow approach of ModelSIM with the stock approach. Money is now a financial asset which agents hold for investment purposes. Agents make a portfolio choice between money and other short-duration government financial assets.

Agent Behaviours & Money Supply Outcomes

Simple agent behaviours direct system dynamics beyond integration of real-world time-series expenditures. A consumer agent's response to government expenditure and taxation for the period (iteration) will fluctuate according to the quantity of short-duration monetary assets accumulated since model run beginning. The quantity of monetary assets accumulated will equate to more or less consumer agent influence over the government agent's expenditure, taxation and distribution decision-making.