CGE (version 0.3.3)

Example9.10: Example 9.10-9.14 in Li (2019)

Description

This is Example 9.10-14 in Li (2019), which illustrates economic cycles in a monetary economy and economic policies ironing economic cycles.

Usage

Example9.10(
  policy = NULL,
  pExg = rbind(NA, NA, 0.25),
  p0 = rbind(0.625, 0.375, 0.25),
  priceAdjustmentVelocity = 0.3,
  ts = TRUE
)

Arguments

policy

a policy function

pExg

an n-vector indicating the exogenous prices (if any).

p0

an initial price n-vector.

priceAdjustmentVelocity

the price adjustment velocity.

ts

if TRUE, the time series of the last iteration are returned.

References

LI Wu (2019, ISBN: 9787521804225) General Equilibrium and Structural Dynamics: Perspectives of New Structural Economics. Beijing: Economic Science Press. (In Chinese)

See Also

sdm; Example9.10.policy.interest.rate; Example9.10.policy.money.supply; Example9.10.policy.deflation; Example9.10.policy.quantitative.easing; Example9.10.policy.tax; Example9.10.policy.deficit.fiscal

Examples

# NOT RUN {
##### no policy
ge <- Example9.10()
matplot(ge$ts.p, type = "l")
matplot(ge$ts.z, type = "l")

##### interest rate policy (Fig. 9.12)
Example9.10(policy = Example9.10.policy.interest.rate)

##### monetary supply policy (Fig. 9.13)
Example9.10(policy = Example9.10.policy.money.supply)

##### deflation policy (Fig. 9.14)
ge <- Example9.10(
  policy = Example9.10.policy.deflation,
  pExg = rbind(NA, NA, 0),
  p0 = rbind(0.625, 0.375, 0), ts = TRUE
)
plot(ge$ts.S[3, 3, ], type = "l")
plot(ge$ts.q[, 3], type = "l")

##### quantitative easing policy (Fig. 9.15)
ge <- Example9.10(
  policy = Example9.10.policy.quantitative.easing,
  pExg = rbind(NA, NA, 0),
  p0 = rbind(0.625, 0.375, 0),
  ts = TRUE
)
plot(log(ge$ts.S[3, 3, ]), type = "l")
plot(ge$ts.q[, 3], type = "l")
plot(log(ge$ts.p[, 1]), type = "l")
lines(log(ge$ts.p[, 2]), col = "blue")

##### deficit fiscal policy (Fig. 9.17; Fig. 9.18)
ge <- Example9.10(
  policy = Example9.10.policy.deficit.fiscal,
  priceAdjustmentVelocity = 0.5, ts = TRUE
)
plot(ge$ts.S[3, 3, ], type = "l")
plot(ge$ts.q[, 1], type = "l")

deficit.Example9.10 <- ge$policy.data
plot(deficit.Example9.10, type = "l")
plot(deficit.Example9.10[, 1], cumsum(deficit.Example9.10[, 2]), type = "l")
plot(deficit.Example9.10[, 1],
  cumsum(deficit.Example9.10[, 2]) /
    (tail(ge$ts.z[, 1] * ge$ts.p[, 1], -399)),
  type = "l"
)

##### tax policy (Fig. 9.16)
ge <- Example9.10(policy = Example9.10.policy.tax)
plot(ge$policy.data, type = "l")
# }