' MODEL GROWTH for Eviews version 6
' from Wynne Godley & Marc Lavoie
' MONETARY ECONOMICS
' Chapter 11

' Before running this program you should have used GL11GROWTH
' to create a workfile and a baseline solution

' This program will generate the charts in figures 11.11A to 11.10B
' discussed in par. 11.9.2

smpl @all

' Store original value of shocked value to baseline
genr ncar_0 = ncar

' Increase the normal capital adequacy ratio
smpl 1960 @last
ncar = 0.11
smpl @all

' Select alternative Scenario 11b

growth_mod.scenario(n, a="_11b") "Scenario 11b"

' Set simulation sample
smpl 1947 @last

' Solve the model for the current sample

growth_mod.solve(i=p)

' Store shocked value to scenario
genr ncar_11b = ncar
' and get back shocked variable to its baseline value
ncar = ncar_0

' Creates charts from simulated variables

' Creates the chart in Figure 11.11C
smpl 1955 2020
graph fig11_11c.line ncar_11b car_11b
fig11_11c.options linepat
fig11_11c.setelem(1) lcolor(blue) lwidth(2) lpat(1)
fig11_11c.setelem(2) lcolor(green) lwidth(2) lpat(2)
fig11_11c.name(1) Normal bank capital adequacy ratio
fig11_11c.name(2) Actual bank capital adequacy ratio
fig11_11c.addtext(t,just(c),just(c), font("Arial", 12, +b)) Figure 11.11C: Evolution of the bank capital adequacy ratio\nfollowing an increase in the normal capital adequacy ratio

show fig11_11c

' Creates the chart in Figure 11.11D
smpl 1955 2020
graph fig11_11d.line r_l_11b
fig11_11d.options linepat
fig11_11d.setelem(1) lcolor(blue) lwidth(2) lpat(1)
fig11_11d.name(1) Interest rate on loans
fig11_11d.addtext(t,just(c),just(c), font("Arial", 12, +b)) Figure 11.11D: Evolution of the interest rate on loans\nfollowing an increase in the normal capital adequacy ratio

show fig11_11d