A simple analysis of a model system with interest juxtaposed alongside real-world UK economic time-series data.

Model System Velocity & Gilt Yields

Model Run Parameter Inputs

Advancing the earlier post showing the simplest collection of model run parameters, we now have one household, one producer and interest payments on Government monetary assets.

See GiltEdged model runs .

  • Run Name: r2d2-477-model-run-22-02-2024
  • Government Expenditure: See Model Input: Real-World Expenditures from the resource page.
  • Taxation rate: 37% (Flat rate; all household agents)
  • Coupon Rate: 1%
  • Interest Rate: See Model Input: Real-World Interest Rates from the resource page.

Velocity Model Bills

Model Bond Price

""" 
G&L pp131-132: The value of a perpetuity (long-term bond) in this step.
Use the interest rate from the previous step to calculate
the price of a long-term bond in this step.
"""
central_bank = get_agents_of_type("Central Bank")
self.PbL = zero_division(self.Coupon_Rate, central_bank.rb)

Model Bond Yield

""" 
Use the bond price in this step to calculate the long-term rate of interest (bond yield (to maturity)).
"""
self.rbL = zero_division(self.Coupon_Rate, self.PbL)

Model Interest Payments

""" 
Connect with the central bank.
"""
central_bank = get_agents_of_type("Central Bank")
self.make_interest_payments(central_bank)

Model Interest & Debt

self.GD = (expenditures - revenues) - val_new_bonds_issued