' Before running this program you should have run REFORM2 (reform2_steady_state.txt) ' to create a workfile and a steady state solution / baseline scenario (Scenario _0)! ' Copy-paste all this text to EViews and run it as a program ' This program will generate four scenarios for money creation under full-reserve banking. 'Scenario _1 = Money creation through government spending 'Scenario _2 = Money creation through tax reduction 'Scenario _3 = Money creation through citizen's dividend 'Scenario _4 = Money creation through repaying government debt (quantitative easing) smpl @all ' Store original values of shocked variables genr b_cb_bar_0 = b_cb_bar genr g_k_0 = g_k genr tau_0 = tau genr div_citizen_0 = div_citizen '***SCENARIO 1 (Money creation through government spending)*** ' Increase the money supply and govt spending smpl 0015 @last b_cb_bar = 65 g_k = g_k_0 + 15/p 'Return govt spending to its previous value after one period smpl 0016 @last g_k = g_k_0 smpl @all ' Select the alternative Scenario reform_mod.scenario "Scenario 1" ' Set simulation sample smpl 0003 @last ' Solve the model for the current sample reform_mod.solve(i=p) ' Store new values of shocked variables genr b_cb_bar_1 = b_cb_bar genr g_k_1 = g_k ' Return shocked variables to their original values b_cb_bar = b_cb_bar_0 g_k = g_k_0 ' end of scenario ' Create charts for simulated variables smpl 0001 0050 ' GDP and inflation graph fig_y_k_1 y_k_1 fig_y_k_1.draw(shade, bottom) 0014 0035 fig_y_k_1.datelabel format(yy) fig_y_k_1.addtext(b) Period fig_y_k_1.addtext(0.05, 0.1, font(b)) "Old" steady state fig_y_k_1.addtext(2, 0.1, font(b)) Transition fig_y_k_1.addtext(3.6, 0.1, font(b)) "New" steady state fig_y_k_1.addtext(t,just(c),just(c), font(14)) Real GDP graph fig_pi_1 pi_1 fig_pi_1.axis(left) units(p) fig_pi_1.addtext(-0.2, -0.3) % fig_pi_1.draw(shade, bottom) 0014 0035 fig_pi_1.datelabel format(yy) fig_pi_1.addtext(b) Period fig_pi_1.addtext(0.05, 0.1, font(b)) "Old" steady state fig_pi_1.addtext(2, 0.1, font(b)) Transition fig_pi_1.addtext(3.6, 0.1, font(b)) "New" steady state fig_pi_1.addtext(t,just(c),just(c), font(14)) Inflation rate ' Monetary and credit aggregates graph fig_h_hh_1 h_hh_1 fig_h_hh_1.draw(shade, bottom) 0014 0035 fig_h_hh_1.datelabel format(yy) fig_h_hh_1.addtext(b) Period fig_h_hh_1.addtext(0.05, 2.8, font(b)) "Old" steady state fig_h_hh_1.addtext(2, 2.8, font(b)) Transition fig_h_hh_1.addtext(3.6, 2.8, font(b)) "New" steady state fig_h_hh_1.addtext(t,just(c),just(c), font(14)) Cash graph fig_m1_h_1 m1_h_1 fig_m1_h_1.draw(shade, bottom) 0014 0035 fig_m1_h_1.datelabel format(yy) fig_m1_h_1.addtext(b) Period fig_m1_h_1.addtext(0.05, 0.1, font(b)) "Old" steady state fig_m1_h_1.addtext(2, 0.1, font(b)) Transition fig_m1_h_1.addtext(3.6, 0.1, font(b)) "New" steady state fig_m1_h_1.addtext(t,just(c),just(c), font(14)) Demand deposits graph fig_m2_h_1 m2_h_1 fig_m2_h_1.draw(shade, bottom) 0014 0035 fig_m2_h_1.datelabel format(yy) fig_m2_h_1.addtext(b) Period fig_m2_h_1.addtext(0.05, 0.1, font(b)) "Old" steady state fig_m2_h_1.addtext(2, 0.1, font(b)) Transition fig_m2_h_1.addtext(3.6, 0.1, font(b)) "New" steady state fig_m2_h_1.addtext(t,just(c),just(c), font(14)) Time deposits graph fig_l_s_1 l_s_1 fig_l_s_1.draw(shade, bottom) 0014 0035 fig_l_s_1.datelabel format(yy) fig_l_s_1.addtext(b) Period fig_l_s_1.addtext(0.05, 2.8, font(b)) "Old" steady state fig_l_s_1.addtext(2, 2.8, font(b)) Transition fig_l_s_1.addtext(3.6, 2.8, font(b)) "New" steady state fig_l_s_1.addtext(t,just(c),just(c), font(14)) Loans ' Bank liquidity and deposit and loan rates graph fig_blr_1 blr_1 blr_bot blr_top fig_blr_1.options linepat fig_blr_1.setelem(2) lpat(dash1) fig_blr_1.setelem(3) lpat(dash1) fig_blr_1.draw(shade, bottom) 0014 0035 fig_blr_1.datelabel format(yy) fig_blr_1.addtext(b) Period fig_blr_1.addtext(0.05, 0.1, font(b)) "Old" steady state fig_blr_1.addtext(2, 0.1, font(b)) Transition fig_blr_1.addtext(3.6, 0.1, font(b)) "New" steady state fig_blr_1.addtext(t,just(c),just(c), font(14)) Bank liquidity ratio graph fig_r_m_1 r_m_1 fig_r_m_1.axis(left) units(p) fig_r_m_1.addtext(-0.3, -0.3) % fig_r_m_1.draw(shade, bottom) 0014 0035 fig_r_m_1.datelabel format(yy) fig_r_m_1.addtext(b) Period fig_r_m_1.addtext(0.05, 1.5, font(b)) "Old" steady state fig_r_m_1.addtext(2, 1.5, font(b)) Transition fig_r_m_1.addtext(3.6, 1.5, font(b)) "New" steady state fig_r_m_1.addtext(t,just(c),just(c), font(14)) Interest rate on time deposits graph fig_r_l_1 r_l_1 fig_r_l_1.axis(left) units(p) fig_r_l_1.addtext(-0.3, -0.3) % fig_r_l_1.draw(shade, bottom) 0014 0035 fig_r_l_1.datelabel format(yy) fig_r_l_1.addtext(b) Period fig_r_l_1.addtext(0.05, 0.1, font(b)) "Old" steady state fig_r_l_1.addtext(2, 0.1, font(b)) Transition fig_r_l_1.addtext(3.6, 0.1, font(b)) "New" steady state fig_r_l_1.addtext(t,just(c),just(c), font(14)) Interest rate on loans ' Bills held by hh and psbr graph fig_b_hh_1 b_hh_1 fig_b_hh_1.draw(shade, bottom) 0014 0035 fig_b_hh_1.datelabel format(yy) fig_b_hh_1.addtext(b) Period fig_b_hh_1.addtext(0.05, 0.1, font(b)) "Old" steady state fig_b_hh_1.addtext(2, 0.1, font(b)) Transition fig_b_hh_1.addtext(3.6, 0.1, font(b)) "New" steady state fig_b_hh_1.addtext(t,just(c),just(c), font(14)) Government bills held by households graph fig_r_b_1 r_b_1 fig_r_b_1.axis(left) units(p) fig_r_b_1.addtext(-0.25, -0.3) % fig_r_b_1.draw(shade, bottom) 0014 0035 fig_r_b_1.datelabel format(yy) fig_r_b_1.addtext(b) Period fig_r_b_1.addtext(0.05, 0.1, font(b)) "Old" steady state fig_r_b_1.addtext(2, 0.1, font(b)) Transition fig_r_b_1.addtext(3.6, 0.1, font(b)) "New" steady state fig_r_b_1.addtext(t,just(c),just(c), font(14)) Interest rate on government bills (main rate) graph fig_psbr_1 psbr_1 fig_psbr_1.draw(shade, bottom) 0014 0035 fig_psbr_1.datelabel format(yy) fig_psbr_1.addtext(b) Period fig_psbr_1.addtext(0.05, 0.1, font(b)) "Old" steady state fig_psbr_1.addtext(2, 0.1, font(b)) Transition fig_psbr_1.addtext(3.6, 0.1, font(b)) "New" steady state fig_psbr_1.addtext(t,just(c),just(c), font(14)) Government budget deficit ' Private wealth graph fig_v_1 v_1 fig_v_1.draw(shade, bottom) 0014 0035 fig_v_1.datelabel format(yy) fig_v_1.addtext(b) Period fig_v_1.addtext(0.05, 0.1, font(b)) "Old" steady state fig_v_1.addtext(2, 0.1, font(b)) Transition fig_v_1.addtext(3.6, 0.1, font(b)) "New" steady state fig_v_1.addtext(t,just(c),just(c), font(14)) Wealth of households ' Public debt graph fig_gd_per_y_1 gd_1/y_1 gd_net_1/y_1 fig_gd_per_y_1.name(1) Gross government debt fig_gd_per_y_1.name(2) Consolidated government debt fig_gd_per_y_1.options linepat fig_gd_per_y_1.setelem(2) lpat(dash2) fig_gd_per_y_1.axis(left) units(p) fig_gd_per_y_1.addtext(-0.4, -0.3) % of GDP fig_gd_per_y_1.draw(shade, bottom) 0014 0035 fig_gd_per_y_1.datelabel format(yy) fig_gd_per_y_1.addtext(b) Period fig_gd_per_y_1.addtext(0.05, 0.1, font(b)) "Old" steady state fig_gd_per_y_1.addtext(2, 0.1, font(b)) Transition fig_gd_per_y_1.addtext(3.6, 0.1, font(b)) "New" steady state fig_gd_per_y_1.addtext(t,just(c),just(c), font(14)) Government debt '***SCENARIO 2 (Money creation through tax reduction)*** ' Increase the money supply and reduce tax rate (so that taxes collected fall by 15) smpl 0015 @last b_cb_bar = 65 tau = 0.157 'Return taxes to its previous value after one period smpl 0016 @last tau = tau_0 smpl @all ' Select the alternative Scenario reform_mod.scenario(n, a="_2") "Scenario 2" ' Set simulation sample smpl 0003 @last ' Solve the model for the current sample reform_mod.solve(i=p) ' Store new values of shocked variables genr b_cb_bar_2 = b_cb_bar genr tau_2 = tau ' Return shocked variables to their original values b_cb_bar = b_cb_bar_0 tau = tau_0 ' end of scenario ' Create charts for simulated variables smpl 0001 0050 ' GDP and inflation graph fig_y_k_2 y_k_2 fig_y_k_2.draw(shade, bottom) 0014 0035 fig_y_k_2.datelabel format(yy) fig_y_k_2.addtext(b) Period fig_y_k_2.addtext(0.05, 0.1, font(b)) "Old" steady state fig_y_k_2.addtext(2, 0.1, font(b)) Transition fig_y_k_2.addtext(3.6, 0.1, font(b)) "New" steady state fig_y_k_2.addtext(t,just(c),just(c), font(14)) Real GDP graph fig_pi_2 pi_2 fig_pi_2.axis(left) units(p) fig_pi_2.addtext(-0.2, -0.3) % fig_pi_2.draw(shade, bottom) 0014 0035 fig_pi_2.datelabel format(yy) fig_pi_2.addtext(b) Period fig_pi_2.addtext(0.05, 0.1, font(b)) "Old" steady state fig_pi_2.addtext(2, 0.1, font(b)) Transition fig_pi_2.addtext(3.6, 0.1, font(b)) "New" steady state fig_pi_2.addtext(t,just(c),just(c), font(14)) Inflation rate ' Demand deposits, time deposits and loans graph fig_m1_h_2 m1_h_2 fig_m1_h_2.draw(shade, bottom) 0014 0035 fig_m1_h_2.datelabel format(yy) fig_m1_h_2.addtext(b) Period fig_m1_h_2.addtext(0.05, 0.1, font(b)) "Old" steady state fig_m1_h_2.addtext(2, 0.1, font(b)) Transition fig_m1_h_2.addtext(3.6, 0.1, font(b)) "New" steady state fig_m1_h_2.addtext(t,just(c),just(c), font(14)) Demand deposits graph fig_m2_h_2 m2_h_2 fig_m2_h_2.draw(shade, bottom) 0014 0035 fig_m2_h_2.datelabel format(yy) fig_m2_h_2.addtext(b) Period fig_m2_h_2.addtext(0.05, 0.1, font(b)) "Old" steady state fig_m2_h_2.addtext(2, 0.1, font(b)) Transition fig_m2_h_2.addtext(3.6, 0.1, font(b)) "New" steady state fig_m2_h_2.addtext(t,just(c),just(c), font(14)) Time deposits graph fig_l_s_2 l_s_2 fig_l_s_2.draw(shade, bottom) 0014 0035 fig_l_s_2.datelabel format(yy) fig_l_s_2.addtext(b) Period fig_l_s_2.addtext(0.05, 0.1, font(b)) "Old" steady state fig_l_s_2.addtext(2, 0.1, font(b)) Transition fig_l_s_2.addtext(3.6, 0.1, font(b)) "New" steady state fig_l_s_2.addtext(t,just(c),just(c), font(14)) Loans ' Bank liquidity and deposit and loan rates graph fig_blr_2 blr_2 blr_bot blr_top fig_blr_2.options linepat fig_blr_2.setelem(2) lpat(dash1) fig_blr_2.setelem(3) lpat(dash1) fig_blr_2.draw(shade, bottom) 0014 0035 fig_blr_2.datelabel format(yy) fig_blr_2.addtext(b) Period fig_blr_2.addtext(0.05, 0.1, font(b)) "Old" steady state fig_blr_2.addtext(2, 0.1, font(b)) Transition fig_blr_2.addtext(3.6, 0.1, font(b)) "New" steady state fig_blr_2.addtext(t,just(c),just(c), font(14)) Bank liquidity ratio graph fig_r_m_2 r_m_2 fig_r_m_2.axis(left) units(p) fig_r_m_2.addtext(-0.3, -0.3) % fig_r_m_2.draw(shade, bottom) 0014 0035 fig_r_m_2.datelabel format(yy) fig_r_m_2.addtext(b) Period fig_r_m_2.addtext(0.05, 1.5, font(b)) "Old" steady state fig_r_m_2.addtext(2, 1.5, font(b)) Transition fig_r_m_2.addtext(3.6, 1.5, font(b)) "New" steady state fig_r_m_2.addtext(t,just(c),just(c), font(14)) Interest rate on time deposits graph fig_r_l_2 r_l_2 fig_r_l_2.axis(left) units(p) fig_r_l_2.addtext(-0.3, -0.3) % fig_r_l_2.draw(shade, bottom) 0014 0035 fig_r_l_2.datelabel format(yy) fig_r_l_2.addtext(b) Period fig_r_l_2.addtext(0.05, 0.1, font(b)) "Old" steady state fig_r_l_2.addtext(2, 0.1, font(b)) Transition fig_r_l_2.addtext(3.6, 0.1, font(b)) "New" steady state fig_r_l_2.addtext(t,just(c),just(c), font(14)) Interest rate on loans ' Bills held by hh and psbr graph fig_b_hh_2 b_hh_2 fig_b_hh_2.draw(shade, bottom) 0014 0035 fig_b_hh_2.datelabel format(yy) fig_b_hh_2.addtext(b) Period fig_b_hh_2.addtext(0.05, 2.8, font(b)) "Old" steady state fig_b_hh_2.addtext(2, 2.8, font(b)) Transition fig_b_hh_2.addtext(3.6, 2.8, font(b)) "New" steady state fig_b_hh_2.addtext(t,just(c),just(c), font(14)) Government bills held by households graph fig_r_b_2 r_b_2 fig_r_b_2.axis(left) units(p) fig_r_b_2.addtext(-0.25, -0.3) % fig_r_b_2.draw(shade, bottom) 0014 0035 fig_r_b_2.datelabel format(yy) fig_r_b_2.addtext(b) Period fig_r_b_2.addtext(0.05, 2.8, font(b)) "Old" steady state fig_r_b_2.addtext(2, 2.8, font(b)) Transition fig_r_b_2.addtext(3.6, 2.8, font(b)) "New" steady state fig_r_b_2.addtext(t,just(c),just(c), font(14)) Interest rate on government bills (base rate) graph fig_psbr_2 psbr_2 fig_psbr_2.draw(shade, bottom) 0014 0035 fig_psbr_2.datelabel format(yy) fig_psbr_2.addtext(b) Period fig_psbr_2.addtext(0.05, 0.1, font(b)) "Old" steady state fig_psbr_2.addtext(2, 0.1, font(b)) Transition fig_psbr_2.addtext(3.6, 0.1, font(b)) "New" steady state fig_psbr_2.addtext(t,just(c),just(c), font(14)) Government budget deficit ' Private wealth graph fig_v_2 v_2 fig_v_2.draw(shade, bottom) 0014 0035 fig_v_2.datelabel format(yy) fig_v_2.addtext(b) Period fig_v_2.addtext(0.05, 0.1, font(b)) "Old" steady state fig_v_2.addtext(2, 0.1, font(b)) Transition fig_v_2.addtext(3.6, 0.1, font(b)) "New" steady state fig_v_2.addtext(t,just(c),just(c), font(14)) Wealth of households ' Public debt graph fig_gd_per_y_2 gd_2/y_2 gd_net_2/y_2 fig_gd_per_y_2.name(1) Gross government debt fig_gd_per_y_2.name(2) Consolidated government debt fig_gd_per_y_2.options linepat fig_gd_per_y_2.setelem(2) lpat(dash2) fig_gd_per_y_2.axis(left) units(p) fig_gd_per_y_2.addtext(-0.4, -0.3) % of GDP fig_gd_per_y_2.draw(shade, bottom) 0014 0035 fig_gd_per_y_2.datelabel format(yy) fig_gd_per_y_2.addtext(b) Period fig_gd_per_y_2.addtext(0.05, 0.1, font(b)) "Old" steady state fig_gd_per_y_2.addtext(2, 0.1, font(b)) Transition fig_gd_per_y_2.addtext(3.6, 0.1, font(b)) "New" steady state fig_gd_per_y_2.addtext(t,just(c),just(c), font(14)) Government debt '***SCENARIO 3 (Money creation through citizen's dividend)*** ' Increase the money supply and cash held by households smpl 0015 @last b_cb_bar = 65 div_citizen = 15 'Return citizen's dividend to zero after one period smpl 0016 @last div_citizen = div_citizen_0 smpl @all ' Select the alternative Scenario reform_mod.scenario(n, a="_3") "Scenario 3" ' Set simulation sample smpl 0003 @last ' Solve the model for the current sample reform_mod.solve(i=p) ' Store new values of shocked variables genr b_cb_bar_3 = b_cb_bar genr div_citizen_3 = div_citizen ' Return shocked variables to their original values b_cb_bar = b_cb_bar_0 div_citizen = div_citizen_0 ' end of scenario ' Create charts for simulated variables smpl 0001 0050 ' GDP and inflation graph fig_y_k_3 y_k_3 fig_y_k_3.draw(shade, bottom) 0014 0035 fig_y_k_3.datelabel format(yy) fig_y_k_3.addtext(b) Period fig_y_k_3.addtext(0.05, 0.1, font(b)) "Old" steady state fig_y_k_3.addtext(2, 0.1, font(b)) Transition fig_y_k_3.addtext(3.6, 0.1, font(b)) "New" steady state fig_y_k_3.addtext(t,just(c),just(c), font(14)) Real GDP graph fig_pi_3 pi_3 fig_pi_3.axis(left) units(p) fig_pi_3.addtext(-0.2, -0.3) % fig_pi_3.draw(shade, bottom) 0014 0035 fig_pi_3.datelabel format(yy) fig_pi_3.addtext(b) Period fig_pi_3.addtext(0.05, 0.1, font(b)) "Old" steady state fig_pi_3.addtext(2, 0.1, font(b)) Transition fig_pi_3.addtext(3.6, 0.1, font(b)) "New" steady state fig_pi_3.addtext(t,just(c),just(c), font(14)) Inflation rate ' Demand deposits, time deposits and loans graph fig_m1_h_3 m1_h_3 fig_m1_h_3.draw(shade, bottom) 0014 0035 fig_m1_h_3.datelabel format(yy) fig_m1_h_3.addtext(b) Period fig_m1_h_3.addtext(0.05, 0.1, font(b)) "Old" steady state fig_m1_h_3.addtext(2, 0.1, font(b)) Transition fig_m1_h_3.addtext(3.6, 0.1, font(b)) "New" steady state fig_m1_h_3.addtext(t,just(c),just(c), font(14)) Demand deposits graph fig_m2_h_3 m2_h_3 fig_m2_h_3.draw(shade, bottom) 0014 0035 fig_m2_h_3.datelabel format(yy) fig_m2_h_3.addtext(b) Period fig_m2_h_3.addtext(0.05, 0.1, font(b)) "Old" steady state fig_m2_h_3.addtext(2, 0.1, font(b)) Transition fig_m2_h_3.addtext(3.6, 0.1, font(b)) "New" steady state fig_m2_h_3.addtext(t,just(c),just(c), font(14)) Time deposits graph fig_l_s_3 l_s_3 fig_l_s_3.draw(shade, bottom) 0014 0035 fig_l_s_3.datelabel format(yy) fig_l_s_3.addtext(b) Period fig_l_s_3.addtext(0.05, 0.1, font(b)) "Old" steady state fig_l_s_3.addtext(2, 0.1, font(b)) Transition fig_l_s_3.addtext(3.6, 0.1, font(b)) "New" steady state fig_l_s_3.addtext(t,just(c),just(c), font(14)) Loans ' Bank liquidity and deposit and loan rates graph fig_blr_3 blr_3 blr_bot blr_top fig_blr_3.options linepat fig_blr_3.setelem(2) lpat(dash1) fig_blr_3.setelem(3) lpat(dash1) fig_blr_3.draw(shade, bottom) 0014 0035 fig_blr_3.datelabel format(yy) fig_blr_3.addtext(b) Period fig_blr_3.addtext(0.05, 0.1, font(b)) "Old" steady state fig_blr_3.addtext(2, 0.1, font(b)) Transition fig_blr_3.addtext(3.6, 0.1, font(b)) "New" steady state fig_blr_3.addtext(t,just(c),just(c), font(14)) Bank liquidity ratio graph fig_r_m_3 r_m_3 fig_r_m_3.axis(left) units(p) fig_r_m_3.addtext(-0.3, -0.3) % fig_r_m_3.draw(shade, bottom) 0014 0035 fig_r_m_3.datelabel format(yy) fig_r_m_3.addtext(b) Period fig_r_m_3.addtext(0.05, 1.5, font(b)) "Old" steady state fig_r_m_3.addtext(2, 1.5, font(b)) Transition fig_r_m_3.addtext(3.6, 1.5, font(b)) "New" steady state fig_r_m_3.addtext(t,just(c),just(c), font(14)) Interest rate on time deposits graph fig_r_l_3 r_l_3 fig_r_l_3.axis(left) units(p) fig_r_l_3.addtext(-0.3, -0.3) % fig_r_l_3.draw(shade, bottom) 0014 0035 fig_r_l_3.datelabel format(yy) fig_r_l_3.addtext(b) Period fig_r_l_3.addtext(0.05, 0.1, font(b)) "Old" steady state fig_r_l_3.addtext(2, 0.1, font(b)) Transition fig_r_l_3.addtext(3.6, 0.1, font(b)) "New" steady state fig_r_l_3.addtext(t,just(c),just(c), font(14)) Interest rate on loans ' Bills held by hh and psbr graph fig_b_hh_3 b_hh_3 fig_b_hh_3.draw(shade, bottom) 0014 0035 fig_b_hh_3.datelabel format(yy) fig_b_hh_3.addtext(b) Period fig_b_hh_3.addtext(0.05, 2.8, font(b)) "Old" steady state fig_b_hh_3.addtext(2, 2.8, font(b)) Transition fig_b_hh_3.addtext(3.6, 2.8, font(b)) "New" steady state fig_b_hh_3.addtext(t,just(c),just(c), font(14)) Government bills held by households graph fig_r_b_3 r_b_3 fig_r_b_3.axis(left) units(p) fig_r_b_3.addtext(-0.25, -0.3) % fig_r_b_3.draw(shade, bottom) 0014 0035 fig_r_b_3.datelabel format(yy) fig_r_b_3.addtext(b) Period fig_r_b_3.addtext(0.05, 2.8, font(b)) "Old" steady state fig_r_b_3.addtext(2, 2.8, font(b)) Transition fig_r_b_3.addtext(3.6, 2.8, font(b)) "New" steady state fig_r_b_3.addtext(t,just(c),just(c), font(14)) Interest rate on government bills (base rate) graph fig_psbr_3 psbr_3 fig_psbr_3.draw(shade, bottom) 0014 0035 fig_psbr_3.datelabel format(yy) fig_psbr_3.addtext(b) Period fig_psbr_3.addtext(0.05, 0.1, font(b)) "Old" steady state fig_psbr_3.addtext(2, 0.1, font(b)) Transition fig_psbr_3.addtext(3.6, 0.1, font(b)) "New" steady state fig_psbr_3.addtext(t,just(c),just(c), font(14)) Government budget deficit ' Private wealth graph fig_v_3 v_3 fig_v_3.draw(shade, bottom) 0014 0035 fig_v_3.datelabel format(yy) fig_v_3.addtext(b) Period fig_v_3.addtext(0.05, 0.1, font(b)) "Old" steady state fig_v_3.addtext(2, 0.1, font(b)) Transition fig_v_3.addtext(3.6, 0.1, font(b)) "New" steady state fig_v_3.addtext(t,just(c),just(c), font(14)) Wealth of households ' Public debt graph fig_gd_per_y_3 gd_3/y_3 gd_net_3/y_3 fig_gd_per_y_3.name(1) Gross government debt fig_gd_per_y_3.name(2) Consolidated government debt fig_gd_per_y_3.options linepat fig_gd_per_y_3.setelem(2) lpat(dash2) fig_gd_per_y_3.axis(left) units(p) fig_gd_per_y_3.addtext(-0.4, -0.3) % of GDP fig_gd_per_y_3.draw(shade, bottom) 0014 0035 fig_gd_per_y_3.datelabel format(yy) fig_gd_per_y_3.addtext(b) Period fig_gd_per_y_3.addtext(0.05, 0.1, font(b)) "Old" steady state fig_gd_per_y_3.addtext(2, 0.1, font(b)) Transition fig_gd_per_y_3.addtext(3.6, 0.1, font(b)) "New" steady state fig_gd_per_y_3.addtext(t,just(c),just(c), font(14)) Government debt '***SCENARIO 4 (Money creation through repaying government debt / quantitative easing)*** ' Increase the money supply by buying back government debt by central bank smpl 0015 @last b_cb_bar = 65 smpl @all ' Select the alternative Scenario reform_mod.scenario(n, a="_4") "Scenario 4" ' Set simulation sample smpl 0003 @last ' Solve the model for the current sample reform_mod.solve(i=p) ' Store new values of shocked variables genr b_cb_bar_4 = b_cb_bar ' Return shocked variables to their original values b_cb_bar = b_cb_bar_0 ' end of scenario ' Create charts for simulated variables smpl 0001 0050 ' GDP and inflation graph fig_y_k_4 y_k_4 fig_y_k_4.draw(shade, bottom) 0014 0035 fig_y_k_4.datelabel format(yy) fig_y_k_4.addtext(b) Period fig_y_k_4.addtext(0.05, 0.1, font(b)) "Old" steady state fig_y_k_4.addtext(2, 0.1, font(b)) Transition fig_y_k_4.addtext(3.6, 0.1, font(b)) "New" steady state fig_y_k_4.addtext(t,just(c),just(c), font(14)) Real GDP graph fig_pi_4 pi_4 fig_pi_4.axis(left) units(p) fig_pi_4.addtext(-0.2, -0.3) % fig_pi_4.draw(shade, bottom) 0014 0035 fig_pi_4.datelabel format(yy) fig_pi_4.addtext(b) Period fig_pi_4.addtext(0.05, 0.1, font(b)) "Old" steady state fig_pi_4.addtext(2, 0.1, font(b)) Transition fig_pi_4.addtext(3.6, 0.1, font(b)) "New" steady state fig_pi_4.addtext(t,just(c),just(c), font(14)) Inflation rate ' Demand deposits, time deposits and loans graph fig_m1_h_4 m1_h_4 fig_m1_h_4.draw(shade, bottom) 0014 0035 fig_m1_h_4.datelabel format(yy) fig_m1_h_4.addtext(b) Period fig_m1_h_4.addtext(0.05, 0.1, font(b)) "Old" steady state fig_m1_h_4.addtext(2, 0.1, font(b)) Transition fig_m1_h_4.addtext(3.6, 0.1, font(b)) "New" steady state fig_m1_h_4.addtext(t,just(c),just(c), font(14)) Demand deposits graph fig_m2_h_4 m2_h_4 fig_m2_h_4.draw(shade, bottom) 0014 0035 fig_m2_h_4.datelabel format(yy) fig_m2_h_4.addtext(b) Period fig_m2_h_4.addtext(0.05, 0.1, font(b)) "Old" steady state fig_m2_h_4.addtext(2, 0.1, font(b)) Transition fig_m2_h_4.addtext(3.6, 0.1, font(b)) "New" steady state fig_m2_h_4.addtext(t,just(c),just(c), font(14)) Time deposits graph fig_l_s_4 l_s_4 fig_l_s_4.draw(shade, bottom) 0014 0035 fig_l_s_4.datelabel format(yy) fig_l_s_4.addtext(b) Period fig_l_s_4.addtext(0.05, 0.1, font(b)) "Old" steady state fig_l_s_4.addtext(2, 0.1, font(b)) Transition fig_l_s_4.addtext(3.6, 0.1, font(b)) "New" steady state fig_l_s_4.addtext(t,just(c),just(c), font(14)) Loans ' Bank liquidity and deposit and loan rates graph fig_blr_4 blr_4 blr_bot blr_top fig_blr_4.options linepat fig_blr_4.setelem(2) lpat(dash1) fig_blr_4.setelem(3) lpat(dash1) fig_blr_4.draw(shade, bottom) 0014 0035 fig_blr_4.datelabel format(yy) fig_blr_4.addtext(b) Period fig_blr_4.addtext(0.05, 0.1, font(b)) "Old" steady state fig_blr_4.addtext(2, 0.1, font(b)) Transition fig_blr_4.addtext(3.6, 0.1, font(b)) "New" steady state fig_blr_4.addtext(t,just(c),just(c), font(14)) Bank liquidity ratio graph fig_r_m_4 r_m_4 fig_r_m_4.axis(left) units(p) fig_r_m_4.addtext(-0.3, -0.3) % fig_r_m_4.draw(shade, bottom) 0014 0035 fig_r_m_4.datelabel format(yy) fig_r_m_4.addtext(b) Period fig_r_m_4.addtext(0.05, 1.5, font(b)) "Old" steady state fig_r_m_4.addtext(2, 1.5, font(b)) Transition fig_r_m_4.addtext(3.6, 1.5, font(b)) "New" steady state fig_r_m_4.addtext(t,just(c),just(c), font(14)) Interest rate on time deposits graph fig_r_l_4 r_l_4 fig_r_l_4.axis(left) units(p) fig_r_l_4.addtext(-0.3, -0.3) % fig_r_l_4.draw(shade, bottom) 0014 0035 fig_r_l_4.datelabel format(yy) fig_r_l_4.addtext(b) Period fig_r_l_4.addtext(0.05, 0.1, font(b)) "Old" steady state fig_r_l_4.addtext(2, 0.1, font(b)) Transition fig_r_l_4.addtext(3.6, 0.1, font(b)) "New" steady state fig_r_l_4.addtext(t,just(c),just(c), font(14)) Interest rate on loans ' Bills held by hh and psbr graph fig_b_hh_4 b_hh_4 fig_b_hh_4.draw(shade, bottom) 0014 0035 fig_b_hh_4.datelabel format(yy) fig_b_hh_4.addtext(b) Period fig_b_hh_4.addtext(0.05, 2.8, font(b)) "Old" steady state fig_b_hh_4.addtext(2, 2.8, font(b)) Transition fig_b_hh_4.addtext(3.6, 2.8, font(b)) "New" steady state fig_b_hh_4.addtext(t,just(c),just(c), font(14)) Government bills held by households graph fig_r_b_4 r_b_4 fig_r_b_4.axis(left) units(p) fig_r_b_4.addtext(-0.25, -0.3) % fig_r_b_4.draw(shade, bottom) 0014 0035 fig_r_b_4.datelabel format(yy) fig_r_b_4.addtext(b) Period fig_r_b_4.addtext(0.05, 2.8, font(b)) "Old" steady state fig_r_b_4.addtext(2, 2.8, font(b)) Transition fig_r_b_4.addtext(3.6, 2.8, font(b)) "New" steady state fig_r_b_4.addtext(t,just(c),just(c), font(14)) Interest rate on government bills (base rate) graph fig_psbr_4 psbr_4 fig_psbr_4.draw(shade, bottom) 0014 0035 fig_psbr_4.datelabel format(yy) fig_psbr_4.addtext(b) Period fig_psbr_4.addtext(0.05, 0.1, font(b)) "Old" steady state fig_psbr_4.addtext(2, 0.1, font(b)) Transition fig_psbr_4.addtext(3.6, 0.1, font(b)) "New" steady state fig_psbr_4.addtext(t,just(c),just(c), font(14)) Government budget deficit ' Private wealth graph fig_v_4 v_4 fig_v_4.draw(shade, bottom) 0014 0035 fig_v_4.datelabel format(yy) fig_v_4.addtext(b) Period fig_v_4.addtext(0.05, 0.1, font(b)) "Old" steady state fig_v_4.addtext(2, 0.1, font(b)) Transition fig_v_4.addtext(3.6, 0.1, font(b)) "New" steady state fig_v_4.addtext(t,just(c),just(c), font(14)) Wealth of households ' Public debt graph fig_gd_per_y_4 gd_4/y_4 gd_net_4/y_4 fig_gd_per_y_4.name(1) Gross government debt fig_gd_per_y_4.name(2) Consolidated government debt fig_gd_per_y_4.options linepat fig_gd_per_y_4.setelem(2) lpat(dash2) fig_gd_per_y_4.axis(left) units(p) fig_gd_per_y_4.addtext(-0.4, -0.3) % of GDP fig_gd_per_y_4.draw(shade, bottom) 0014 0035 fig_gd_per_y_4.datelabel format(yy) fig_gd_per_y_4.addtext(b) Period fig_gd_per_y_4.addtext(0.05, 0.1, font(b)) "Old" steady state fig_gd_per_y_4.addtext(2, 0.1, font(b)) Transition fig_gd_per_y_4.addtext(3.6, 0.1, font(b)) "New" steady state fig_gd_per_y_4.addtext(t,just(c),just(c), font(14)) Government debt