' 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 11.3A to 11.3D ' discussed in par. 11.7.3 smpl @all ' Store original value of shocked value to baseline genr gr_g_0 = gr_g ' Increase the rate of growth in government expenditure smpl 1960 1960 gr_g = 0.035 smpl @all ' Select Scenario 2a growth_mod.scenario(n, a="_2a") "Scenario 2a" ' Set simulation sample smpl 1947 @last ' Solve the model for the current sample growth_mod.solve(i=p) ' Store shocked value to scenario genr gr_g_2a =gr_g ' and get back shocked variable to its baseline value gr_g = gr_g_0 ' Creates charts from simulated variables ' Creates the chart in Figure 11.3A smpl 1955 2020 graph fig11_3a.line y_k_2a/y_k_0 g_k_2a/g_k_0 fig11_3a.options linepat fig11_3a.scale(left) range(0.98,1.03) fig11_3a.setelem(1) lcolor(blue) lwidth(2) lpat(1) fig11_3a.setelem(2) lcolor(green) lwidth(2) lpat(2) fig11_3a.name(1) Real output fig11_3a.name(2) Real government expenditures fig11_3a.addtext(t,just(c),just(c), font("Arial", 12, +b)) Figure 11.3A: Evolution of real output and real govt expenditures\nfollowing an increase in govt exp. growth rate show fig11_3a ' Creates the chart in Figure 11.3B smpl 1955 2020 graph fig11_3b.line er_2a-er_0+1 0.99 1.01 fig11_3b.options linepat fig11_3b.scale(left) range(0.97,1.03) fig11_3b.setelem(1) lcolor(blue) lwidth(2) lpat(1) fig11_3b.name(1) Employment rate fig11_3b.addtext(t,just(c),just(c)) Figure 11.3B: Evolution of the employment rate\nfollowing an increase in govt exp. growth rate show fig11_3b ' Creates the chart in Figure 11.3C smpl 1955 2020 graph fig11_3c.line psbr_2a/psbr_0 gd_2a/gd_0 fig11_3c.options linepat fig11_3c.setelem(1) lcolor(blue) lwidth(2) lpat(1) fig11_3c.setelem(2) lcolor(green) lwidth(2) lpat(2) fig11_3c.name(1) Government deficit fig11_3c.name(2) Government debt fig11_3c.addtext(t,just(c),just(c)) Figure 11.3C: Evolution of government debt and deficit\nfollowing an increase in govt exp. growth rate show fig11_3c ' Creates the chart in Figure 11.3D smpl 1955 2020 graph fig11_3d.line blr_2a/blr_0 (l_fd_2a/in_2a)/(l_fd_0/in_0) fig11_3d.options linepat fig11_3d.setelem(1) lcolor(blue) lwidth(2) lpat(1) fig11_3d.setelem(2) lcolor(green) lwidth(2) lpat(2) fig11_3d.name(1) Bank liquidity ratio fig11_3d.name(2) Loans to inventories ratio of firms fig11_3d.addtext(t,just(c),just(c)) Figure 11.3C: Evolution of BLR and L/IN\nfollowing an increase in govt exp. growth rate show fig11_3d