Figure 17: Keynesian Boost

 

The model parameters are:

 

Description Value
Bank (reserves) 20
Household loans -100
Business loans -100
Wages rate (as % buiness loans) 25%
Bank loan rate 4%

 

1. Boost business loans by -12.5 every year for four years

2. Sticky wages = Business loans *0.25, or 25, whichever is greater

 

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