globals [ exchangeRateRegime stage-counter exchangeRate initialExchangeRate realExchangeRate initialRealExchangeRate stageDescription1 stageDescription2 stageDescription3 stageDescription4 finalChangeinBalance finalChangeInExchangerate% finalChangeInRealExchangeRate% finalChangeInOutput% finalChangeInPrices% ] breed [homeCountries homeCountry] breed [worlds world] homeCountries-own [ importShare ; input exportShare ; input governmentShare ; input privateDomesticDemandShare output ; input changeInOutput changeInOutput% initialHomePriceOfImports homePriceOfImports worldPriceOfImports initialVolumeOfImports volumeOfImports valueOfImportsAtHomePrices initialHomeProducedPrices ; input homeProducedPrices initialVolumeOfExports volumeOfExports changeInVolumeOfExports valueOfExportsAtHomePrices initialPriceIndex priceIndex initialBalance balance changeInHomePriceOfImports% fullHomePriceOfImports ; needed for depreciation procedure fullChangeInHomePriceOfImports% ; needed for depreciation procedure ] worlds-own [ priceIndex ; set at 1 valueOfImportsAtWorldPrices initialValueOfImportsAtWorldPrices initialWorldPriceOfExports worldPriceOfExports newWorldPriceOfExports changeInWorldPriceOfExports% halfChangeInWorldPriceOfExports% ; used in Depreciation scenario initialVolumeOfExports volumeOfExports initialValueOfExportsAtWorldPrices valueOfExportsAtWorldPrices ] ;_________________________________________________________________________________________________________ to setup clear-all ask patches [ set pcolor white] end ;------------------------------------------------------------------------------------ to go set stage-counter 0 initialise-countries if scenario = "Inflation" and exchangeRateRegime = "Floating" [ calculate-effect-of-inflation-with-floating-rate ] if scenario = "Inflation" and exchangeRateRegime = "Eurozone" [ calculate-effect-of-inflation-in-eurozone ] if scenario = "Depreciation" and exchangeRateRegime = "Eurozone" [ calculate-effect-of-depreciation ] if scenario = "Depreciation" and exchangeRateRegime = "Floating" [ output-print (word "Invalid scenario choice when there is a floating exchange rate") ] if scenario = "Exog. export change" and exchangeRateRegime = "Floating"[ calculate-effect-of-exog-change-in-exports ] if scenario = "Exog. export change" and exchangeRateRegime = "Eurozone" [ output-print (word "Invalid scenario choice in Eurozone") ] if scenario = "Fiscal policy" and exchangeRateRegime = "Floating" [ calculate-fiscal-impact ] if scenario = "Fiscal policy" and exchangeRateRegime = "Eurozone" [ output-print (word "Invalid scenario choice in Eurozone") ] generate-results-file end ;______________________________________________________________________________________________________________ ; PROCEDURES ;______________________________________________________________________________________________________________ to initialise-countries clear-turtles clear-output ask patches [ set pcolor white] create-homeCountries 1 [ set shape "square" set size 10 set pen-size 1 set color red setxy 10 10 set output 100 ] create-worlds 1 [ set shape "circle" set size 20 set pen-size 1 set color blue setxy -5 -5 set priceIndex 1 ] set stage-counter 0 ;-------------------------------------- ; set characteristics of Home country if type-of-country = "UK" [ set exchangeRateRegime "Floating" ask homeCountry 0 [ set importShare 0.34 set exportShare 0.32 set governmentShare 0.5 set homeProducedPrices 1.2 ] calculate-initial-values calculate-initial-exchange-rate calculate-initial-balance calculate-prices ] if type-of-country = "USA" [ set exchangeRateRegime "Floating" ask homeCountry 0 [ set importShare 0.17 set exportShare 0.14 set governmentShare 0.4 set homeProducedPrices 0.8 ] calculate-initial-values calculate-initial-exchange-rate calculate-initial-balance calculate-prices ] if type-of-country = "Strong Eurozone" [ set exchangeRateRegime "Eurozone" calculate-eurozone-exchange-rate ask homeCountry 0 [ set importShare 0.46 set exportShare 0.52 set governmentShare 0.5 set homeProducedPrices 1 ] calculate-initial-values calculate-initial-balance calculate-prices ] if type-of-country = "Weak Eurozone" [ set exchangeRateRegime "Eurozone" calculate-eurozone-exchange-rate ask homeCountry 0 [ set importShare 0.32 set exportShare 0.27 set governmentShare 0.5 set homeProducedPrices 0.8 ] calculate-initial-values calculate-initial-balance calculate-prices ] if type-of-country = "Open Eurozone" [ set exchangeRateRegime "Eurozone" calculate-eurozone-exchange-rate ask homeCountry 0 [ set importShare 0.80 set exportShare 0.85 set governmentShare 0.5 set homeProducedPrices 1.1 ] calculate-initial-values calculate-initial-balance calculate-prices ] ask homeCountry 0 [ set privateDomesticDemandShare precision ( 1 - governmentShare - ( exportShare - importShare )) 3 ] ; Prices. ; homeProducedPrices is an input Price Level sets the basis. T ; The home price of imports is set after the exchange rate is fixed. ; The priceIndex is a weighted sum of the two prices, the weight being the import share and (1 - importShare). ask homeCountry 0 [ set initialPriceIndex priceIndex set initialHomeProducedPrices homeProducedPrices set homePriceOfImports initialHomePriceOfImports ] ;__________________________________________________________________________________________________________________________ ; RECORD INITIAL POSITIONS ;__________________________________________________________________________________________________________________________ output-print ( word "Stage: " stage-counter " INITIAL" ) output-print ("INPUTS" ) output-print (type-of-country) output-print ( word "Import Share " [ importShare ] of homeCountry 0 ) output-print ( word "Export share " [ exportShare ] of homeCountry 0 ) output-print ( word "Government share " [ governmentShare ] of homeCountry 0 ) output-print ( word "Domestic share " [ privateDomesticDemandShare ] of homeCountry 0 ) output-print ( word "Home produced prices " [ homeProducedPrices ] of homeCountry 0) output-print ( word "Output "[ output ] of homeCountry 0 ) output-print (" ") output-print ("OUTPUTS") output-print ( word "Exchange Rate " initialExchangeRate ) output-type ( word "Volume: Imports: " [ initialVolumeOfImports ] of homeCountry 0 ) output-print( word " Exports: " [ initialVolumeOfExports ] of homeCountry 0 ) output-print ( word "Price index: " [ initialPriceIndex ] of homeCountry 0 ) output-type ( word "Prices: Imports (home): " [ initialHomePriceOfImports ] of homeCountry 0 ) output-print( word " Exports (world): " [ initialWorldPriceOfExports ] of world 1 ) output-type ( word "Value: Imports: " [ valueOfImportsAtHomePrices ] of homeCountry 0 ) output-type ( word " Exports: " [ valueOfExportsAtHomePrices ] of homeCountry 0 ) output-print ( word " Balance " [ initialBalance ] of homeCountry 0 ) output-print ( word "Real Exchange Rate " initialRealExchangeRate ) output-print ( word " " ) do-plots generate-results-file end ;___________________________________________________________________________________________________________________ ; SCENARIOS ;___________________________________________________________________________________________________________________ ; INFLATION to calculate-effect-of-inflation-with-floating-rate ;------------ ; Stage 1 increment-stage set stageDescription1 " Export prices and exchange rate adjusts " ask homeCountry 0 [ set homeProducedPrices precision (( 1 + change% / 100 ) * homeProducedPrices ) 3 ; set homePriceOfExports homeProducedPrices set valueOfExportsAtHomePrices precision ( volumeOfExports * homeProducedPrices ) 3 ] calculate-exchange-rate ask homeCountry 0 [ calculate-balance calculate-home-country-price-index ] calculate-real-exchange-rate ; results output-print (word "Stage: " stage-counter " " stageDescription1 ) show-results ;------------- ; Stage 2 increment-stage set stageDescription2 " Import prices rise" ; recalculate balances etc ask homeCountry 0 [ ; exchange rate change in Stage 1 affects demand for exports set homePriceOfImports precision (( [ priceIndex ] of world 1 ) / exchangeRate ) 3 set changeInHomePriceOfImports% precision ((( homePriceOfImports - initialHomePriceOfImports ) / initialHomePriceOfImports ) * 100 ) 3 calculate-new-volume-of-imports set valueOfImportsAtHomePrices precision ( homePriceOfImports * volumeOfImports ) 3 ; balance calculate-balance ; effect on output recalculate-output ] ask homeCountry 0 [ calculate-home-country-price-index ] calculate-real-exchange-rate output-print (word "Stage: " stage-counter " " stageDescription2 ) show-results show-end-results end ;------------------------------------------------------- to calculate-effect-of-inflation-in-eurozone ;------------ ; Stage 1 increment-stage set stageDescription1 " Export prices rise " ask homeCountry 0 [ set homeProducedPrices precision (( 1 + change% / 100 ) * homeProducedPrices ) 3 ; set homePriceOfExports homeProducedPrices set valueOfExportsAtHomePrices precision ( volumeOfExports * homeProducedPrices ) 3 ] ask homeCountry 0 [ calculate-balance calculate-home-country-price-index ] calculate-real-exchange-rate ; results output-print (word "Stage: " stage-counter " " stageDescription1 ) show-results ;------------- ; Stage 2 increment-stage set stageDescription2 " Export volumes fall" ask world 1 [ calculate-world-price-of-exports set changeInWorldPriceOfExports% precision ((( worldPriceOfExports - initialWorldPriceOfExports ) / initialWorldPriceOfExports ) * 100 ) 3 set volumeOfExports precision ( initialVolumeOfExports * ( 1 + ( exportPriceElasticity * changeInWorldPriceOfExports% ) / 100 ) ) 3 ] ; recalculate balances etc ask homeCountry 0 [ set volumeOfExports [ volumeOfExports ] of world 1 ; balance calculate-balance ; effect on output recalculate-output ] ask homeCountry 0 [ calculate-home-country-price-index ] calculate-real-exchange-rate output-print (word "Stage: " stage-counter " " stageDescription2 ) show-results show-end-results end ;------------------------------------------------------------------------------------ ;------------------------------------------------------------------------------------ ;DEPRECIATION ; Eurozone countries only to calculate-effect-of-depreciation; demonstrates J-curve ;------------ ; Stage 1: import prices change but not volumes. increment-stage set stageDescription1 " Import prices partly change " set exchangeRate precision ( (1 + change% / 100 ) * exchangeRate ) 3 ask homeCountry 0 [ ; imports calculate-adjusted-home-price-of-imports ; volume of imports does not change calculate-value-of-imports-at-home-prices ; exports at home prices not affected ; balance calculate-balance ; no effect on output ] calculate-real-exchange-rate ; results output-print (word "Stage: " stage-counter " " stageDescription1 ) show-results ;------------- ; Stage 2: volumes change increment-stage set stageDescription2 " Export prices and both volumes change" ; home price of exports does not change ; export price fall increases demand ask world 1 [ ; fully adjusted change set worldPriceOfExports precision ( ( [ homeProducedPrices ] of homecountry 0 ) * exchangeRate ) 3 ; half of fully adjusted change set changeInWorldPriceOfExports% precision (( 0.5 * ( worldPriceOfExports - initialWorldPriceOfExports ) / initialWorldPriceOfExports ) * 100 ) 3 set volumeOfExports precision ( volumeOfExports * ( 1 + ( exportPriceElasticity * changeInWorldPriceOfExports% / 100 ) ) ) 3 ] ; recalculate balances etc ask homeCountry 0 [ ; import price rise in Stage 1 reduces demand calculate-new-volume-of-imports set valueOfImportsAtHomePrices precision ( homePriceOfImports * volumeOfImports ) 3 ; new volume of exports set volumeOfExports ( [ volumeOfExports ] of world 1 ) set valueOfExportsAtHomePrices precision ( volumeOfExports * homeProducedPrices ) 3 ; balance calculate-balance ; effect on output recalculate-output ] calculate-real-exchange-rate ; results output-print (word "Stage: " stage-counter " " stageDescription2 ) show-results ;--------------------------------- ; Stage 3: full adjustment increment-stage set stageDescription3 " Full adjustment" ; recalculate exports ask world 1 [ set volumeOfExports precision ( volumeOfExports * ( 1 + ( exportPriceElasticity * changeInWorldPriceOfExports% / 100 ) ) ) 3 ] ; recalculate balance etc ask homeCountry 0 [ ;import prices and volumes set homePriceOfImports precision (( 1 + ( changeInHomePriceOfImports% / 100 )) * homePriceOfImports ) 3 calculate-new-volume-of-imports set valueOfImportsAtHomePrices precision ( homePriceOfImports * volumeOfImports ) 3 ; export demand set volumeOfExports ( [ volumeOfExports ] of world 1 ) set valueOfExportsAtHomePrices precision ( volumeOfExports * homeProducedPrices ) 3 ; balance calculate-balance ; effect on output recalculate-output ] ; exchange rates calculate-real-exchange-rate output-print (word "Stage: " stage-counter " " stageDescription3 ) show-results show-end-results end ;------------------------------------------------------------------------------------------------------------------------- ;------------------------------------------------------------------------------------------------------------------------- ; EXOG EXPORT CHANGE ; floating only to calculate-effect-of-exog-change-in-exports ; stage 1 set stage-counter stage-counter + 1 set stageDescription1 " Vol. of exports changes " ask world 1 [ set volumeOfExports precision ( volumeOfExports * (1 + ( change% / 100 ))) 3 ] ask homeCountry 0 [ set volumeOfExports ( [ volumeOfExports ] of world 1 ) set valueOfExportsAtHomePrices precision ( volumeOfExports * homeProducedPrices ) 3 ; balance calculate-balance ; effect on output recalculate-output ] output-print (word "Stage: " stage-counter " " stageDescription1 ) show-results ;---------------------------------------- ; stage 2 set stage-counter stage-counter + 1 set stageDescription2 " Exchange rate changes: no volume changes " if exchangeRateRegime = "Floating" [ calculate-exchange-rate ] ask homeCountry 0 [ set homePriceOfImports precision (( [ priceIndex ] of world 1 ) / exchangeRate ) 3 set changeInHomePriceOfImports% precision ( ( ( homePriceOfImports - initialHomePriceOfImports ) / initialHomePriceOfImports ) * 100 ) 3 ; calculate-new-volume-of-imports calculate-value-of-imports-at-home-prices ; exports - new exchange rate changes price at home ; set volumeOfExports [ volumeOfExports ] of world 1 ; set valueOfExportsAtHomePrices precision ( homeProducedPrices * volumeOfExports ) 3 calculate-balance ; effect on output recalculate-output ] calculate-real-exchange-rate output-print (word "Stage: " stage-counter " " stageDescription2 ) show-results ;---------------------------------------- ; stage 3 set stage-counter stage-counter + 1 set stageDescription3 " Volumes changes " ask world 1 [ set worldPriceOfExports precision ( ( [ homeProducedPrices ] of homecountry 0 ) * exchangeRate ) 3 set changeInWorldPriceOfExports% precision (( ( worldPriceOfExports - initialWorldPriceOfExports ) / initialWorldPriceOfExports ) * 100 ) 3 set volumeOfExports precision ( volumeOfExports * ( 1 + ( exportPriceElasticity * changeInWorldPriceOfExports% / 100 ) ) ) 3 ] ask homeCountry 0 [ ; set homePriceOfImports precision (( [ priceIndex ] of world 1 ) / exchangeRate ) 3 ; set changeInHomePriceOfImports% precision ( ( ( homePriceOfImports - initialHomePriceOfImports ) / initialHomePriceOfImports ) * 100 ) 3 calculate-new-volume-of-imports calculate-value-of-imports-at-home-prices ; exports - new exchange rate changes price at home set volumeOfExports [ volumeOfExports ] of world 1 set valueOfExportsAtHomePrices precision ( homeProducedPrices * volumeOfExports ) 3 calculate-balance ; effect on output recalculate-output ] calculate-real-exchange-rate output-print (word "Stage: " stage-counter " " stageDescription3 ) show-results show-end-results end ;------------------------------------------------------------------------------------------------------------------------- ;------------------------------------------------------------------------------------------------------------------------- ; FISCAL to calculate-fiscal-impact ; stage 1 set stage-counter stage-counter + 1 set stageDescription1 " Vol. of imports and exchange rate change " ask homeCountry 0 [ set governmentShare precision ( governmentShare * (1 + ( change% / 100 ))) 3 recalculate-output set volumeOfImports precision ( importShare * output ) 3 recalculate-output ] if exchangeRateRegime = "Floating" [ calculate-exchange-rate ] ask homeCountry 0 [ recalculate-output set homePriceOfImports precision ( 1 / exchangeRate ) 3 ; worldPrice = 1 calculate-value-of-imports-at-home-prices calculate-balance ] calculate-real-exchange-rate output-print (word "Stage: " stage-counter " " stageDescription1 ) show-results ;-------------------------------------------- ; stage 2 set stage-counter stage-counter + 1 set stageDescription2 " Adjust to new exchange rate change " ask world 1 [ recalculate-demand-for-exports ] ask homeCountry 0 [ set changeInHomePriceOfImports% precision ( ( ( homePriceOfImports - initialHomePriceOfImports ) / initialHomePriceOfImports ) * 100 ) 3 calculate-new-volume-of-imports calculate-value-of-imports-at-home-prices ; exports - new exchange rate changes price at home set volumeOfExports [ volumeOfExports ] of world 1 set valueOfExportsAtHomePrices precision ( homeProducedPrices * volumeOfExports ) 3 calculate-balance ; effect on output recalculate-output ] calculate-real-exchange-rate output-print (word "Stage: " stage-counter " " stageDescription2 ) show-results show-end-results end ;--------------------------------------------------------------------------------------------------- ;---------------------------------------------------------------------------------------------------- ; Exports mean home country's exports ;------------------------------------------- ; OBSERVER PROCEDURES ;------------------------------------------- to increment-stage set stage-counter stage-counter + 1 end ;-------------------------------- to calculate-exchange-rate ; to calculate world exports to home country at world prices given world exports = home country imports ask world 1 [ set valueOfImportsAtWorldPrices precision ( [ volumeOfImports ] of homeCountry 0 * ( [ priceIndex ] of world 1 )) 3 ] ; imports are Home country's imports; exports are Home country's exports set exchangeRate precision ( ( [ valueOfImportsAtWorldPrices ] of world 1 ) / ( [ valueOfExportsAtHomePrices ] of homeCountry 0 )) 3 end ;----------------------------- to calculate-real-exchange-rate ; price level of home country will change as import prices change calculate-home-country-price-index set realExchangeRate precision (( [ priceIndex ] of homeCountry 0 * exchangeRate ) / ([ priceIndex ] of world 1 ) ) 3 end ;------------------------------------------ ; INITIALISATION PROCEDURES FOR BOTH ;------------------------------------------ to calculate-initial-values ; this is done BEFORE the exchange rate is calculated ask homeCountry 0 ; money values are at home prices [ ; exports i.e. home country's exports set initialVolumeOfExports precision ( output * exportShare ) 3 set volumeOfExports initialVolumeOfExports set valueOfExportsAtHomePrices precision ( homeProducedPrices * volumeOfExports ) 3 ; imports i.e. home country's imports set initialVolumeOfImports precision ( output * importShare ) 3 set volumeOfImports initialVolumeOfImports ] ask world 1 ; money values are at world prices [ set initialVolumeOfExports ( [ volumeOfExports ] of homeCountry 0 ) set volumeOfExports initialVolumeOfExports set initialValueOfImportsAtWorldPrices precision ( ([ priceIndex ] of world 1 ) * [ volumeOfImports ] of homeCountry 0 ) 3 ] end ;------------------------------------------ ; WORLD PROCEDURES ;------------------------------------------ ; used throughout? to calculate-world-price-of-exports set worldPriceOfExports precision ( ( [ homeProducedPrices] of homecountry 0 ) * exchangeRate ) 3 end ;------------------------- ; used in fiscal policy to recalculate-demand-for-exports ; new exchange rate changes price of exports and thus demand set newWorldPriceOfExports precision ( ( [ homeProducedPrices ] of homeCountry 0 * exchangeRate ) ) 3 set changeInWorldPriceOfExports% precision ((( newWorldPriceOfExports - worldPriceOfExports ) / worldPriceOfExports ) * 100 ) 3 set volumeOfExports precision ( volumeOfExports * ( 1 + ( exportPriceElasticity * changeInWorldPriceOfExports% / 100 ) ) ) 3 set worldPriceOfExports newWorldPriceOfExports end ;----------------------------------------- ; HOME COUNTRY PROCEDURES ;----------------------------------------- to calculate-eurozone-exchange-rate ask homeCountry 0 [ set importShare 0.43 set exportShare 0.46 set governmentShare 0.5 set homeProducedPrices 1 ] calculate-initial-values calculate-initial-exchange-rate end ;---------------------------------------------- to calculate-initial-exchange-rate calculate-exchange-rate set initialExchangeRate exchangeRate end ;--------------------------------------------- to calculate-initial-balance ask homeCountry 0 [ set homePriceOfImports precision (( [ priceIndex ] of world 1 ) / initialExchangeRate ) 3 set initialHomePriceOfImports homePriceOfImports set valueOfImportsAtHomePrices precision ( homePriceOfImports * volumeOfImports ) 3 set valueOfExportsAtHomePrices precision ( initialVolumeOfExports * homeProducedPrices ) 3 calculate-balance set initialBalance balance ] end ;--------------------------- to calculate-prices ; Must be done AFTER exchange rate is calculated calculate-real-exchange-rate set initialRealExchangeRate realExchangeRate ask world 1 [ set initialWorldPriceOfExports precision ( [ homeProducedPrices ] of homeCountry 0 * exchangeRate ) 3 set worldPriceOfExports initialWorldPriceOfExports ] end ;-------------------------------- ; used throughout to calculate-balance set balance precision ( valueOfExportsAtHomePrices - valueOfImportsAtHomePrices ) 3 end ;--------------------------------------- ; used in depreciation scenario to calculate-adjusted-home-price-of-imports set fullHomePriceOfImports precision (( [ priceIndex ] of world 1 ) / exchangeRate ) 3 set fullChangeInHomePriceOfImports% precision (( fullHomePriceOfImports - homePriceOfImports ) / homePriceOfImports * 100) 3 set changeInHomePriceOfImports% precision ( 0.5 * fullChangeInHomePriceOfImports% ) 3 set homePriceOfImports precision (( 1 + ( changeInHomePriceOfImports% / 100 )) * homePriceOfImports ) 3 end ;------------------------------ to calculate-value-of-imports-at-home-prices set valueOfImportsAtHomePrices precision ( homePriceOfImports * volumeOfImports ) 3 end ;------------------------------ to calculate-new-volume-of-imports set volumeOfImports precision ( volumeOfImports * ( 1 + ( importPriceElasticity * changeInHomePriceOfImports% )/ 100 ) ) 3 end ;------------------------------- to recalculate-output set output precision (( privateDomesticDemandShare * 100 ) + ( governmentShare * 100) + volumeOfExports - volumeOfImports ) 3 end ;------------------------------ to calculate-home-country-price-index ; does not change weights ask homeCountry 0 [ set priceIndex precision ( ( homePriceOfImports * importShare ) + ((1 - importShare ) * homeProducedPrices )) 3 ] end ;_______________________________________________________________________________________________________________________ ; RESULTS ;_______________________________________________________________________________________________________________________ to show-results output-print ( word "Exchange Rate " exchangeRate ) output-print ( word "Output "[ output ] of homeCountry 0 ) output-type ( word "Volume: Imports: " [ volumeOfImports ] of homeCountry 0 ) output-print ( word " Exports: " [ volumeOfExports ] of homeCountry 0 ) output-type ( word "% change in prices: Imports (home): " [ changeInHomePriceOfImports% ] of homeCountry 0 ) output-print ( word " Exports (world): " [ changeInWorldPriceOfExports% ] of world 1 ) output-type ( word "Value: Imports: " [ valueOfImportsAtHomePrices ] of homeCountry 0 ) output-type ( word " Exports: " [ valueOfExportsAtHomePrices ] of homeCountry 0 ) output-print ( word " Balance " [ balance ] of homeCountry 0 ) output-print ( word "Home price index " [ priceIndex ] of homeCountry 0) output-print ( word "Real Exchange Rate " realExchangeRate ) output-print ( word " " ) do-plots end ;------------------------------------------- to show-end-results set finalChangeinBalance precision ( ([ balance ] of homeCountry 0 ) - ( [ initialBalance ] of homeCountry 0 ) ) 2 set finalChangeInExchangerate% precision (( exchangeRate - initialExchangeRate ) / initialExchangeRate * 100 ) 2 set finalChangeInRealExchangeRate% precision (( realExchangeRate - initialRealExchangeRate ) / initialRealExchangeRate * 100 ) 2 set finalChangeInOutput% precision ((( [ output ] of homeCountry 0 ) - 100 ) / 100 * 100) 2 set finalChangeInPrices% precision ((( [ priceIndex ] of homeCountry 0 ) - ( [ initialPriceIndex ] of homeCountry 0) ) / ( [ initialPriceIndex ] of homeCountry 0 ) * 100) 2 output-print ( word " " ) output-print "TOTAL CHANGES" output-print ( word "Change in balance " finalChangeinBalance ) output-print ( "% changes in" ) output-print ( word "Exchange Rate " finalChangeInExchangerate% ) output-print ( word "Real Exchange Rate " finalChangeInRealExchangeRate% ) output-print ( word "Output " finalChangeInOutput% ) output-print ( word "Prices " finalChangeInPrices% ) end ;------------------- to do-plots plot-output plot-volumes plot-prices plot-balance plot-exchangeRate plot-realExchangeRate end ;---------------------------------------------------------- to plot-output set-current-plot "Output" set-plot-x-range 0 5 set-plot-y-range 50 150 set-current-plot-pen "Output" plotxy stage-counter [ output ] of homeCountry 0 end to plot-volumes set-current-plot "Volumes" set-plot-x-range 0 5 set-plot-y-range 0 100 set-current-plot-pen "Exports" plotxy stage-counter [ volumeOfExports ] of homeCountry 0 set-current-plot-pen "Imports" plotxy stage-counter [ volumeOfImports ] of homeCountry 0 end to plot-prices set-current-plot "Prices" set-plot-x-range 0 5 set-plot-y-range 0 2 set-current-plot-pen "World Exp" plotxy stage-counter [ worldPriceOfExports ] of world 1 set-current-plot-pen "Home Imp" plotxy stage-counter [ homePriceOfImports ] of homeCountry 0 set-current-plot-pen "Home Lvl" plotxy stage-counter [ priceIndex ] of homeCountry 0 end to plot-balance set-current-plot "Balance" set-plot-x-range 0 5 set-plot-y-range -25 100 set-current-plot-pen "Imports" plotxy stage-counter [ valueOfImportsAtHomePrices ] of homeCountry 0 set-current-plot-pen "Exports" plotxy stage-counter [ valueOfExportsAtHomePrices ] of homeCountry 0 set-current-plot-pen "BoT" plotxy stage-counter [ balance ] of homeCountry 0 end to plot-exchangeRate set-current-plot "Exchange Rate" set-plot-x-range 0 5 set-plot-y-range 0 2 plotxy stage-counter exchangeRate end to plot-realExchangeRate set-current-plot "Real Exchange Rate" set-plot-x-range 0 5 set-plot-y-range 0 2 plotxy stage-counter realExchangeRate end ;--------------------------------------------- to generate-results-file file-open (word "IntTrade-Policy-"type-of-country"-"change%"-"scenario".csv" ) file-print (word "INITIAL SETTINGS AND VALUES" ) file-print (type-of-country) file-print (word "Import Share " [ importShare ] of homeCountry 0 ) file-print (word "Export share " [ exportShare ] of homeCountry 0 ) file-print (word "Government share " [ governmentShare ] of homeCountry 0 ) file-print (word "Domestic share " [ privateDomesticDemandShare ] of homeCountry 0 ) file-print (word "Home produced prices " [ homeProducedPrices ] of homeCountry 0) file-print (word "Initial price index " [ initialPriceIndex ] of homeCountry 0 ) file-print (word "Initial exchange rate " initialExchangeRate ) file-print (word "Initial real exchange rate " initialRealExchangeRate ) file-print (" ") file-print (word "STAGE 1 " stageDescription1 ) file-print (word "STAGE 2 " stageDescription2 ) file-print (word "STAGE 3 " stageDescription3 ) file-print (word "STAGE 4 " stageDescription4 ) file-print (" ") file-print ( word "Change in balance " finalChangeinBalance ) file-print ( word "% changes in" ) file-print ( word "Exchange Rate " finalChangeInExchangerate% ) file-print ( word "Real Exchange Rate " finalChangeInRealExchangeRate%) file-print ( word "Output " finalChangeInOutput% ) file-print ( word "Prices " finalChangeInPrices% ) export-all-plots (word "IntTrade-Policy-"type-of-country"-"change%"-"scenario".csv" ) file-close end @#$#@#$#@ GRAPHICS-WINDOW 572 590 817 783 20 20 3.95122 1 10 1 1 1 0 0 0 1 -20 20 -20 20 0 0 1 ticks 30.0 BUTTON 12 10 76 43 Setup setup NIL 1 T OBSERVER NIL NIL NIL NIL 1 BUTTON 81 10 144 43 Go Go NIL 1 T OBSERVER NIL NIL NIL NIL 1 PLOT 844 38 1132 244 Balance Stage NIL 0.0 5.0 -25.0 100.0 true true "" "" PENS "Imports" 1.0 0 -6459832 true "" "" "Exports" 1.0 0 -10899396 true "" "" "BoT" 1.0 0 -16777216 true "" "" PLOT 579 72 803 228 Exchange Rate Stage NIL 0.0 5.0 0.0 4.0 true false "" "" PENS "default" 1.0 0 -16777216 true "" "" PLOT 840 440 1131 628 Output Stage Quantity 0.0 5.0 50.0 150.0 true false "" "" PENS "Output" 1.0 0 -16777216 true "" "" MONITOR 15 116 108 161 NIL stage-counter 0 1 11 PLOT 579 238 803 391 Real Exchange Rate Stage NIL 0.0 5.0 0.0 2.0 true false "" "" PENS "default" 1.0 0 -16777216 true "" "" OUTPUT 9 169 524 799 12 INPUTBOX 194 70 259 130 change% 10 1 0 Number CHOOSER 161 10 335 55 type-of-country type-of-country "UK" "USA" "Strong Eurozone" "Weak Eurozone" "Open Eurozone" 0 PLOT 843 247 1131 434 Volumes Stage NIL 0.0 5.0 0.0 100.0 true true "" "" PENS "Imports" 1.0 0 -2674135 true "" "" "Exports" 1.0 0 -13345367 true "" "" CHOOSER 8 63 179 108 scenario scenario "Inflation" "Depreciation" "Exog. export change" "Fiscal policy" 0 TEXTBOX 277 75 553 155 Enter % change e.g. \n- under the \"Depreciation\" option, for a 10% depreciation enter \"-10\"\n- under the \"Fiscal policy\" option, for a 10% cut in Govt expenditure, enter \"-10\" 11 0.0 1 PLOT 577 400 804 566 Prices Stage NIL 0.0 5.0 0.0 2.0 true true "" "" PENS "World Exp" 1.0 0 -13345367 true "" "" "Home Imp" 1.0 0 -2674135 true "" "" "Home Lvl" 1.0 0 -13840069 true "" "" CHOOSER 379 11 517 56 importPriceElasticity importPriceElasticity -0.5 -1 -1.5 1 CHOOSER 531 10 669 55 exportPriceElasticity exportPriceElasticity -0.5 -1 -1.5 1 TEXTBOX 760 680 910 736 The red square is the Home country.\n\nThe blue circle is the World. 11 0.0 1 @#$#@#$#@ ## WHAT IS IT? The model permits the exploration of the dynamics underlying changes in exchange rates and the balance of trade. ## HOW IT WORKS There are just two agents, one representing the Home country and the other, the rest of the world, or ‘World’ for short. The exchange rate means the number of units of World currency exchanged for each unit of Home currency. To simplify the model it is assumed that the price of exports is determined by prices in the Home country and prices in the Home country do not affect the overall price level in the World. ### Definition of the Home country The Home country can be set to represent one of five countries: • UK, which is a fairly open economy with a floating exchange rate • USA, which also has a floating exchange rate but is a relatively closed economy • A ‘strong’ Eurozone country, based on Germany, which is a fairly open economy with a fixed exchange rate and a balance of trade surplus. • A ‘weak’ Eurozone country, based on Greece, which has a similar degree of openness to the UK, but a larger negative trade balance (as a proportion of GDP) and a fixed exchange rate • An ‘open’ Eurozone country, based on the Netherlands, which has a balance of trade surplus and a fixed exchange rate. For the Eurozone countries, the exchange rate is calculated for the Eurozone as a whole in the same way as it is for the UK and USA with their floating exchange rates. This rate is then applied to the three Eurozone countries irrespective of their individual circumstances. ### Scenarios Four scenarios are specified: • Inflation (or deflation) • The effect of a depreciation (or appreciation) • An exogenous change in demand for exports • A change in fiscal policy. ### Outputs Results are shown on the Interface and sent to a csv file. ## HOW TO USE IT Select the type of Home country and the scenario. Choose the size of the change and the import and the export price elasticities. This model is purely deterministic and so there is no need for multiple runs. ## CREDITS AND REFERENCES Runs on NetLogo 5.2. For more information, see Hamill, L. & Gilbert, N. (2016) Agent-based Modelling in Economics. Wiley: Chapter 8. To refer to this model: Hamill, L. & Gilbert, N. (2016) International Trade model. 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