Implementing in CircuitJS

Building the Loanable Funds Model

  1. Create Godly Tables for each sector
    • Banks: Reserves, Households, Firms as columns
    • Households: Households, DebtFirms as assets
    • Firms: Firms as asset, DebtFirms as liability
    • Treasury: Government as asset, DebtGov as liability
  2. Define Parameters
    • WageShare = 0.6
    • τFirms = 0.25
    • τHH = 0.5
    • IntRate = 0.05
    • CreditShare = 0.5
    • TaxRate = 0.20
    • SpendRate = 0.21 (for 1% deficit)
  3. Create Flow Equations
    • GDP = Firms / τFirms (use Divider)
    • Wages = GDP × WageShare (use Multiplier)
    • Consume = Households / τHH (use Divider)
    • Credit = GDP × CreditShare (use Multiplier)
    • Tax = GDP × TaxRate (use Multiplier)
    • SpendGov = GDP × SpendRate (use Multiplier)
    • Bonds = (SpendGov - Tax) + DebtGov × IntRate (use Adder)
  4. Monitor Key Metrics
    • Scope: DebtGov / GDP ratio
    • Scope: IntGov / GDP ratio
    • Pie Chart: Sectoral balances

Building the BOMD Model

  1. Restructure Tables

    • Banks: Add DebtFirms and DebtGov as Assets
    • Households: Remove DebtFirms (only deposits)
    • Firms: Remove DebtFirms liability
    • Add Central Bank table
    • Treasury: Government at Central Bank

  2. Modify Flows

    • Credit now increases bank assets (DebtFirms)
    • Bonds now increase bank assets (DebtGov)
    • Interest flows to Banks, not Households
    • Government account at Central Bank

  3. Same Parameters as Loanable Funds

  4. Compare Results

    • Run both models side-by-side
    • Observe debt/GDP trajectories
    • Verify stability differences

Visualization Tips

  • Current Transactions Matrix: Shows all flows between sectors
  • Scope Elements: Plot debt ratios over time (50-200 years)
  • Pie Charts: Display sectoral equity distribution
  • Stop Time Elements: Pause at key checkpoints (50, 100, 150, 200 years)
  • Percent Meters: Show debt/GDP and interest/GDP ratios

Next: Policy Implications →

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