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Currency Counter - Currents in production and consumption

Description:

In this model, relantionships of circulating money and generating real value from resources are studied. Economic production generates products from environmental resources and human goods and services. These are sold to consumers who use the products to generate services which they sell to the producers.

Example:

  • Agricultural production of food which consumers in the city use to make the machinery, pesticides and fertilizer needed for agricultural production.
    		• Diagram

    Variables:

    Q = storages of products
    C = consumer assets
    M1 = producers money

    Equations:

    R = I/(1 + K0*JG)
    JS = K1*M2/P1
    M2 = TM - M1
    JG = K2*M1/P2
    P = K4*R*JG

    Simulation:

    The graph shows the changes of M1(green), M2(magenta), Q(red) and C(blue) over a time period.
    Source code: Econpac.java

    "What if" Experiments:

  • What is the effect of increasing the money supply TM, without changing the resource availability or the prices?
  • Suppose the price of human services and labor were increased, other things being the same? What is the effect on stored products and consumers assets?
    		•