Figure 15: Bank Bailouts with Bank Reserves Rule and 'Sticky' Wages
The model parameters are:
Description | Value |
Bank (reserves) | 70 |
Household loans | -100 |
Business loans | -100 |
Wages rate (as % buiness loans) | 25% |
Bank loan rate | 4% |
1. Bank bailouts are spent at 25% annually, until reserves = 20
2. Sticky wages = Business loans *0.25, or 25, whichever is greater