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

 

 

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