EViews macros for building models in
Wynne Godley and Marc Lavoie
Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth

Table of contents Chapter 11 Notes on EViews version Notation Copyright Comments Guestbook

Chapter 11. A Growth Model Prototype

Model GROWTH

Model GROWTH vers.b, includes a reaction function for the real interest rate on bills

Model GROWTH

Model GROWTH is a highly non-linear model comprising all sectors analyzed in previous models, in the context of a growing economy.
Since the model is rather complex, and it is analyzed in detail through several different exercises, we have produced separate macros for separate tasks.

Download: gl11growth (Eviews 5 to 8) or gl11growth_v4 (Eviews 4.1)

Download the macro above to generate a baseline solution. Then choose one (or maybe all) of the macros below to replicate exercises in the book.

Model GROWTH - First experiment (part one): an increase in the target real wage rate

Download: gl11growth1a (Eviews 5 to 8) or gl11growth1a_v4 (Eviews 4.1)

Download the macro above to generate the charts in figures 11.2A and 11.2B.

Model GROWTH - First experiment (part two): an increase in the target real wage rate which does not affect the long-run real interest rate on bills

Download: gl11growth1b (Eviews 5 to 8) or gl11growth1b_v4 (Eviews 4.1)

Download the macro above to generate the charts in figures 11.2C and 11.1D.

Model GROWTH - Second experiment (part one): an increase in the growth rate of government expenditure for one year

Download: gl11growth2a (Eviews 5 to 8) or gl11growth2a_v4 (Eviews 4.1)

Download the macro above to generate the charts in figures 11.3A to 11.3D.

Model GROWTH - Second experiment (part two): a decrease in the income tax rate

Download: gl11growth2b (Eviews 5 to 8) or gl11growth2b_v4 (Eviews 4.1)

Download the macro above to generate the chart in figure 11.3E.

Model GROWTH - Third experiment: a permanent increase in the growth rate of government expenditure

Download: gl11growth3 (Eviews 5 to 8) or gl11growth3_v4 (Eviews 4.1)

Download the macro above to generate the charts in figures 11.4A to 11.4C.

Model GROWTH - Fourth experiment: an increase in four steps in the nominal interest rate on government bills

Download: gl11growth4 (Eviews 5 to 8) or gl11growth4_v4 (Eviews 4.1)

Download the macro above to generate the charts in figures 11.5A to 11.5E.

Model GROWTH vers.b, includes a reaction function for the real interest rate on bills

Fifth experiment: a permanent increase in the growth rate of government expenditures, with stable bill real rates

Download: gl11growth_rr (Eviews 5 to 8) or gl11growth_rr_v4 (Eviews 4.1)

Download the macro above to generate a baseline solution and the charts in figures 11.6A and 11.6B.

Model GROWTH - Sixth experiment: a permanent increase in the growth rate of government expenditures, with the Central bank stabilizing the employment rate

This exercise is left to the reader.

Model GROWTH - Seventh experiment: an increase in the propensity to consume out of income

Download: gl11growth7 (Eviews 5 to 8) or gl11growth7_v4 (Eviews 4.1)

Download the macro above to generate the charts in figures 11.7A to 11.7G.

Model GROWTH - Eighth experiment: an increase in the ratio of new loans to personal income

Download: gl11growth8 (Eviews 5 to 8) or gl11growth8_v4 (Eviews 4.1)

Download the macro above to generate the charts in figures 11.8A to 11.8E.

Model GROWTH - Nineth experiment (part one): an increase in the desire to hold equities, offset by a drop in in the desire to hold deposits

Download: gl11growth9a (Eviews 5 to 8) or gl11growth9a_v4 (Eviews 4.1)

Download the macro above to generate the charts in figures 11.9A to 11.9C.

Model GROWTH - Nineth experiment (part two): an increase in the desire to hold equities, offset by a drop in in the desire to hold bills and bonds

Download: gl11growth9b (Eviews 5 to 8) or gl11growth9b_v4 (Eviews 4.1)

Download the macro above to generate the charts in figures 11.9D.

Model GROWTH - Tenth experiment: an increase in the target proportion of gross investment financed by retained earnings

Download: gl11growth10 (Eviews 5 to 8) or gl11growth10_v4 (Eviews 4.1)

Download the macro above to generate the charts in figures 11.10A to 11.10E.

Model GROWTH - Eleventh experiment (part one): an increase in the percentage of defaulting loans

Download: gl11growth11a (Eviews 5 to 8) or gl11growth11a_v4 (Eviews 4.1)

Download the macro above to generate the charts in figures 11.11A to 11.11B.

Model GROWTH - Eleventh experiment (part two): an increase in the normal capital adequacy ratio

Download: gl11growth11b (Eviews 5 to 8) or gl11growth11b_v4 (Eviews 4.1)

Download the macro above to generate the charts in figures 11.11C to 11.11D.