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Textbook Macroeconomics

Description:

The overall economy is the subject of macroeconomics. Introductory texts use the equations given in the figure to describe the main features of an economy. Saving is proportional to income; income is the sum of the income money saved and that spent in consumption; savings goes into investment and is equal to it.

Examples:

  • The macroeconomic models are often applied to nations, states and regions. The provisions for source control added to these minimodels make the macroeconomics equations dynamic and realistic.
    		•  Diagram

    Variables:

    K = storage of capital assets
    Y = income

    Equations:

    Y = C + S
    PR = K4*E*C*K
    DK = K3*I - K6*E*C*K - K2*k
    R = J/(1 + K0*C*S)
    S = K5*Y

    Simulation:

    The graph shows the changes of K(red) and Y(blue) over a time period.
    Source code: Macroec.java

    "What if" Experiments:

  • What is the effect of an increase in depreciation rate of growing assets? Double K2.
  • What is the effect of increasing the percent of the income saved and reinvested? Increase K5.
  • What is the effect of increasing the availabilitity of energy in the exponential case in figure I? Increase I.
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