spatchcock/monetary_economics_python

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 # -*- coding: utf-8 -*- # This script describes how private sector savings interact affect the fiscal # multiplier based on a geometric series interpretation. It is described in the # accompanying iPython Notebook and at # # http://misunderheard.org/monetary_economics/2016/11/20/government_money_and_saving/ # import matplotlib.pyplot as plt import numpy as np G = 100 # government spending theta = 0.2 # tax rate alpha = 0.9 # propensity to consume n_rounds = 30 # number of rounds we'll consider # create an array of numbers from 0-30, one for each spending round r = np.arange(0,n_rounds) # solve equation 1 for each individual round y_n = G*(alpha*(1-theta))**r # solve equation 2 for each individual round sum_y = G*(1-(alpha*(1-theta))**(r+1))/(1-alpha*(1-theta)) # plot plt.bar(r,sum_y, color='r',label='cumulative income') plt.bar(r,y_n, label='spending round income') plt.grid() plt.legend(loc='center right') plt.xlabel('Spending round, n') plt.ylabel('Income') plt.tight_layout() plt.show() # calculate the final income Y = G/(1-alpha*(1-theta)) print(Y) # calculate the fiscal multiplier print(1/(1-alpha*(1-theta))) # calculate the total tax revenue T = theta * Y print(T) # calculate the government budget position print(T - G) # calculate the total, accumulated savings S = (1-alpha) * (1-theta) * Y print(S)