In [1]:
# This line configures matplotlib to show figures embedded in the notebook,
# instead of opening a new window for each figure. More about that later.
# If you are using an old version of IPython, try using '%pylab inline' instead.
%matplotlib inline
from pysolve.model import Model
from pysolve.utils import is_close,round_solution
import matplotlib.pyplot as plt
In [2]:
def create_openfix_model():
model = Model()
model.set_var_default(0)
model.set_param_default(0)
model.var('BdUKUK', desc='Bills issued by the UK acquired by the UK: demand')
model.var('BsUKUK', desc='Bills issued by the UK acquired by the UK: supply')
model.var('BcbdUKUS', desc='Bills issued by the US, demanded by the UK central bank')
model.var('BcbsUKUS', desc='Bills issued by the US, supplied to the UK central bank')
model.var('BcbdUKUK', desc='Bills issued by the UK, demanded by the UK central bank')
model.var('BcbsUKUK', desc='Bills issued by the UK, supplied to the UK central bank')
model.var('BsUK', desc='Bills issued by the UK - total supply')
model.var('BdUKUS', desc='Bills issued by the US acquired by the UK: demand')
model.var('BsUKUS', desc='Bills issued by the US acquired by the UK: supply')
model.var('BdUSUK', desc='Bills issued by the UK acquired by the US: demand')
model.var('BsUSUK', desc='Bills issued by the UK acquired by the US: supply')
model.var('BsUS', desc='Bills issued by the US - total supply')
model.var('BdUSUS', desc='Bills issued by the US acquired by the US: demand')
model.var('BsUSUS', desc='Bills issued by the US acquired by the US: supply')
model.var('BcbdUSUS', desc='Bills issued by the US, demanded by the US central bank')
model.var('BcbsUSUS', desc='Bills issued by the US, supplied to the US central bank')
model.var('CkUK', desc='Real consumption in the UK')
model.var('CkUS', desc='Real consumption in the US')
model.var('CABUK', desc='Current account balance in the UK')
model.var('CABUS', desc='Current account balance in the US')
model.var('CONSUK', desc='Consumption in the UK')
model.var('CONSUS', desc='Consumption in the US')
model.var('DSUK', desc='Domestic sales in the UK')
model.var('DSUS', desc='Domestic sales in the US')
model.var('DSkUK', desc='Real domestic sales in the UK')
model.var('DSkUS', desc='Real domestic sales in the US')
model.var('FcbUK', desc='Profits of the central bank in the UK')
model.var('FcbUS', desc='Profits of the central bank in the US')
model.var('GUK', desc='Government expenditure in the UK')
model.var('GUS', desc='Government expenditure in the US')
model.var('HdUK', desc='Demand for cash of the UK')
model.var('HsUK', desc='Supply of cash for the UK')
model.var('HdUS', desc='Demand for cash of the US')
model.var('HsUS', desc='Supply for cash for the US')
model.var('IMUK', desc='Imports of the UK from the US')
model.var('IMUS', desc='Imports of the US from the UK')
model.var('IMkUK', desc='Real imports of the UK from the US')
model.var('IMkUS', desc='Real imports of the US from the UK')
model.var('KABUK', desc='Current account balance in the UK')
model.var('KABUS', desc='Current account balance in the US')
model.var('KABPUK', desc='Capital account balance in the UK, excluding official transactions')
model.var('KABPUS', desc='Capital account balance in the US, excluding official transactions')
model.var('NAFAUK', desc='Net accumulation of financial assets in the UK')
model.var('NAFAUS', desc='Net accumulation of financial assets in the US')
model.var('NUK', desc='Employment in the UK')
model.var('NUS', desc='Employment in the US')
model.var('PDSUK', desc='Price of domestic sales in the UK')
model.var('PDSUS', desc='Price of domestic sales in the US')
model.var('PGUK', desc='Price of gold in the UK')
model.var('PMUK', desc='Price of imports in the UK')
model.var('PMUS', desc='Price of imports in the US')
model.var('PSUK', desc='Price of sales in the UK')
model.var('PSUS', desc='Price of sales in the US')
model.var('PSBRUK', desc='Government deficit in the UK')
model.var('PSBRUS', desc='Government deficit in the US')
model.var('PYUK', desc='Price of output in the UK')
model.var('PYUS', desc='Price of output in the US')
model.var('PXUK', desc='Price of exports in the UK')
model.var('PXUS', desc='Price of exports in the US')
model.var('SUK', desc='Real sales in the UK')
model.var('SUS', desc='Real sales in the US')
model.var('SkUK', desc='Real sales in the UK')
model.var('SkUS', desc='Real sales in the US')
model.var('TUK', desc='Tax revenue in the UK')
model.var('TUS', desc='Tax revenue in the US')
model.var('VUK', desc='Net financial assets of the UK')
model.var('VUS', desc='Net financial assets of the US')
model.var('VkUK', desc='Real net financial assets of the UK')
model.var('VkUS', desc='Real net financial assets of the US')
model.var('XUK', desc='Exports from the UK to the US')
model.var('XUS', desc='Exports from the US to the UK')
model.var('XkUK', desc='Real exports from the U to the UK')
model.var('XkUS', desc='Real exports from the U to the US')
model.var('XRUS', desc='Exchange rate: units of US currency against 1 unit of UK currency')
model.var('YDrUK', desc='Disposable income in the UK')
model.var('YDrUS', desc='Disposable income in the US')
model.var('YDhsUK', desc='Haig-Simons disposable income in the UK')
model.var('YDhsUS', desc='Haig-Simons disposable income in the US')
model.var('YDhskUK', desc='Real Haig-Simons disposable income in the UK')
model.var('YDhskUS', desc='Real Haig-Simons disposable income in the US')
model.var('YDhsekUK', desc='Expected real Haig-Simons disposable income in the UK')
model.var('YDhsekUS', desc='Expected real Haig-Simons disposable income in the US')
model.var('YUK', desc='Income in the UK')
model.var('YUS', desc='Income in the US')
model.var('YkUK', desc='Real income in the UK')
model.var('YkUS', desc='Real income in the US')
model.param('DXREUK', desc='Expected change in the exchange rate of the UK (measured as units of the UK currency against 1 unit of the US currency)')
model.param('DXREUS', desc='Expected change in the exchange rate of the US (measured as units of the US currency against 1 unit of the UK currency)')
model.param('GkUK', desc='Real government expenditure in the UK')
model.param('GkUS', desc='Real government expenditure in the US')
model.param('ORUK', desc='Gold reserves in the UK')
model.param('ORUS', desc='Gold reserves in the US')
model.param('PGUS', desc='Price of gold in the US')
model.param('PRUK', desc='Productivity in the UK')
model.param('PRUS', desc='Productivity in the US')
model.param('RUK', desc='Interest rate on the UK bills')
model.param('RUS', desc='Interest rate on the US bills')
model.param('WUK', desc='Nominal wage rate in the UK')
model.param('WUS', desc='Nominal wage rate in the US')
model.param('XREUK', desc='Expected exchange rate: units of UK currency against 1 unit of US currency')
model.param('XREUS', desc='Expected exchange rate: units of US currency against 1 unit of UK currency')
model.param('XRUK', desc='Exchange rate: units of UK currency against 1 unit of US currency')
model.param('alpha1UK', desc='Propensity to consume out of income in the UK')
model.param('alpha2UK', desc='Propensity to consume out of wealth in the UK')
model.param('alpha1US', desc='Propensity to consume out of income in the US')
model.param('alpha2US', desc='Propensity to consume out of wealth in the US')
model.param('eps0', desc='Parameter determining real exports in the UK')
model.param('eps1', desc='Parameter determining real exports in the UK')
model.param('eps2', desc='Parameter determining real exports in the UK')
model.param('lambda10', desc='Parameter in asset demand function')
model.param('lambda11', desc='Parameter in asset demand function')
model.param('lambda12', desc='Parameter in asset demand function')
model.param('lambda20', desc='Parameter in asset demand function')
model.param('lambda21', desc='Parameter in asset demand function')
model.param('lambda22', desc='Parameter in asset demand function')
model.param('lambda30', desc='Parameter in asset demand function')
model.param('lambda31', desc='Parameter in asset demand function')
model.param('lambda32', desc='Parameter in asset demand function')
model.param('lambda40', desc='Parameter in asset demand function')
model.param('lambda41', desc='Parameter in asset demand function')
model.param('lambda42', desc='Parameter in asset demand function')
model.param('lambda50', desc='Parameter in asset demand function')
model.param('lambda51', desc='Parameter in asset demand function')
model.param('lambda52', desc='Parameter in asset demand function')
model.param('mu0', desc='Parameter determining real imports in the UK')
model.param('mu1', desc='Parameter determining real imports in the UK')
model.param('mu2', desc='Parameter determining real imports in the UK')
model.param('nu0m', desc='Parameter determining import prices in the UK')
model.param('nu1m', desc='Parameter determining import prices in the UK')
model.param('nu0x', desc='Parameter determining import prices in the UK')
model.param('nu1x', desc='Parameter determining import prices in the UK')
model.param('thetaUK', desc='Tax rate in the UK')
model.param('thetaUS', desc='Tax rate in the US')
model.param('phiUK', desc='mark-up in the UK')
model.param('phiUS', desc='mark-up in the US')
# Accounting Identities
# ---------------------
# 12.1 : Disposable income in the UK
model.add('YDrUK = (YUK + RUK(-1)*BdUKUK(-1) + XRUS*RUS(-1)*BsUKUS(-1))*(1 - thetaUK) + d(XRUS)*BsUKUS(-1)')
model.add('YDhsUK = YDrUK + d(XRUS)*BsUKUS(-1)') # 12.2 : Haig-Simons disposable income in the UK
model.add('VUK - VUK(-1) = YDrUK - CONSUK') # 12.3 : Wealth accumulation in the UK
# 12.4 : Disposable income in the US
model.add('YDrUS = (YUS + RUS(-1)*BdUSUS(-1) + XRUK*RUK(-1)*BsUSUK(-1))*(1 - thetaUS) + d(XRUK)*BsUSUK(-1)')
model.add('YDhsUS = YDrUS + d(XRUK)*BsUSUK(-1)') # 12.5 : Haig-Simons disposable income in the US
model.add('VUS - VUS(-1) = YDrUS - CONSUS') # 12.6 : Wealth accumulation in the US
model.add('TUK = thetaUK*(YUK + RUK(-1)*BdUKUK(-1) + XRUS*RUS(-1)*BsUKUS(-1))') # 12.7 : Taxes in the UK
model.add('TUS = thetaUS*(YUS + RUS(-1)*BdUSUS(-1) + XRUK*RUK(-1)*BsUSUK(-1))') # 12.8 : Taxes in the US
# Equations 12.9 and 12.10 dropped in favor on 12.53 and 12.54
model.add('FcbUK = RUK(-1)*BcbdUKUK(-1) + RUS(-1)*BcbsUKUS(-1)*XRUS') # 12.11 : UK central bank profits
model.add('FcbUS = RUS(-1)*BcbdUSUS(-1)') # 12.12 : US central bank profits
model.add('BsUK = BsUK(-1) + GUK + RUK(-1)*BsUK(-1) - TUK - FcbUK') # 12.13 : UK Govt budget constraint
model.add('BsUS = BsUS(-1) + GUS + RUS(-1)*BsUS(-1) - TUS - FcbUS') # 12.14 : US Govt budget constraint
# 12.15 : UK Current account balance
model.add('CABUK = XUK - IMUK + XRUS*RUS(-1)*BsUKUS(-1) - RUK(-1)*BsUSUK(-1) + RUS(-1)*BcbsUKUS(-1)*XRUS')
# 12.16 : UK Capital account balance
model.add('KABUK = KABPUK - (XRUS*d(BcbsUKUS) + PGUK*d(ORUK))')
# 12.17 : US Current acount balance
model.add('CABUS = XUS - IMUS + XRUK*RUK(-1)*BsUSUK(-1) - RUS(-1)*BsUKUS(-1) - RUS(-1)*BcbsUKUS(-1)')
# 12.18 : US Capital account balance
model.add('KABUS = KABPUS + d(BcbsUKUS) - PGUS*d(ORUS)')
model.add('KABPUK = -d(BsUKUS)*XRUS + d(BsUSUK)') # 12.19 : UK capital account balance, net of official transactions
model.add('KABPUS = -d(BsUSUK)*XRUK + d(BsUKUS)') # 12.20 : US capital account balance, net of official transactions
# Trade
# -----
# 12.21 : Import prices in UK
model.add('PMUK = exp(nu0m + nu1m*log(PYUS) + (1 - nu1m)*log(PYUK) - nu1m*log(XRUK))')
# 12.22 : Export prices in UK
model.add('PXUK = exp(nu0x + nu1x*log(PYUS) + (1 - nu1x)*log(PYUK) - nu1x*log(XRUK))')
model.add('PXUS = PMUK*XRUK') # 12.23 : Export prices in US
model.add('PMUS = PXUK*XRUK') # 12.24 : Import prices in US
# 12.25 : Real exports from UK, depends on current relative price
model.add('XkUK = exp(eps0 - eps1*log(PMUS/PYUS) + eps2*log(YkUS))')
# 12.26 : Real imports of UK
model.add('IMkUK = exp(mu0 - mu1*log(PMUK(-1)/PYUK(-1)) + mu2*log(YkUK))')
model.add('XkUS = IMkUK') # 12.27 : Real exports from US
model.add('IMkUS = XkUK') # 12.28 : Real imports of US
model.add('XUK = XkUK*PXUK') # 12.29 : Exports of UK
model.add('XUS = XkUS*PXUS') # 12.30 : Exports of US
model.add('IMUK = IMkUK*PMUK') # 12.31 : Imports of UK
model.add('IMUS = IMkUS*PMUS') # 12.32 : Imports of US
# Income and expenditure
# ----------------------
model.add('VkUK = VUK/PDSUK') # 12.33 : Real wealth in UK
model.add('VkUS = VUS/PDSUS') # 12.34 : Real wealth in US
# 12.35 : Real Haig-Simons disposable income in UK
model.add('YDhskUK = YDrUK/PDSUK - VkUK(-1)*d(PDSUK)/PDSUK')
# 12.36 : Real Haig-Simons disposable income in US
model.add('YDhskUS = YDrUS/PDSUS - VkUS(-1)*d(PDSUS)/PDSUS')
# 12.37 : Real consumption in UK
model.add('CkUK = alpha1UK*YDhsekUK + alpha2UK*VkUK(-1)')
# 12.38 : Real consumption in US
model.add('CkUS = alpha1US*YDhsekUS + alpha2US*VkUS(-1)')
# 12.39 Expected real Haig-Simons disposable income in UK
model.add('YDhsekUK = (YDhskUK + YDhskUK(-1))/2')
# 12.40 Expected real Haig-Simons disposable income in US
model.add('YDhsekUS = (YDhskUS + YDhskUS(-1))/2')
model.add('SkUK = CkUK + GkUK + XkUK') # 12.41 : Real sales in UK
model.add('SkUS = CkUS + GkUS + XkUS') # 12.42 : Real sales in US
model.add('SUK = SkUK*PSUK') # 12.43 : Value of sales in UK
model.add('SUS = SkUS*PSUS') # 12.44 : Value of sales in US
model.add('PSUK = (1 + phiUK)*(WUK*NUK + IMUK)/SkUK') # 12.45 : Price of sales in UK
model.add('PSUS = (1 + phiUS)*(WUS*NUS + IMUS)/SkUS') # 12.46 : Price of sales in US
model.add('PDSUK = (SUK - XUK)/(SkUK - XkUK)') # 12.47 : Price of domestic sales in UK
model.add('PDSUS = (SUS - XUS)/(SkUS - XkUS)') # 12.48 : Price of domestic sales in US
model.add('DSUK = SUK - XUK') # 12.49 : Domestic sales in UK
model.add('DSUS = SUS - XUS') # 12.50 : Domestic sales in US
model.add('DSkUK = CkUK + GkUK') # 12.51 : Real domestic sales in UK
model.add('DSkUS = CkUS + GkUS') # 12.52 : Real domestic sales in US
model.add('YUK = SUK - IMUK') # 12.53 : Value of output in UK
model.add('YUS = SUS - IMUS') # 12.54 : Value of output in US
model.add('YkUK = SkUK - IMkUK') # 12.55 : Value of real output in UK
model.add('YkUS = SkUS - IMkUS') # 12.56 : Value of real output in US
model.add('PYUK = YUK/YkUK') # 12.57 : Price of output in UK
model.add('PYUS = YUS/YkUS') # 12.58 : Price of output in US
model.add('CONSUK = CkUK*PDSUK') # 12.59 : Consumption in UK
model.add('CONSUS = CkUS*PDSUS') # 12.60 : Consumption in US
model.add('GUK = GkUK*PDSUK') # 12.61 : Govt expenditure in UK
model.add('GUS = GkUS*PDSUS') # 12.62 : Govt expenditure in US
# Note : tax definitions in the book as eqns 12.63 and 12.64 are
# already defined here as eqns 12.7 and 12.8
model.add('NUK = YkUK/PRUK') # 12.65 : Employment in UK
model.add('NUS = YkUS/PRUS') # 12.66 : Employment in US
# Asset Demands
# -------------
# 12.67 : Demand for UK bills in UK
model.add('BdUKUK = VUK*(lambda10 + lambda11*RUK - lambda12*(RUS + DXREUS))')
# 12.68 : Demand for US bills in UK
model.add('BdUKUS = VUK*(lambda20 - lambda21*RUK + lambda22*(RUS + DXREUS))')
model.add('HdUK = VUK - BdUKUK - BdUKUS') # 12.69 : Demand for money in UK
# 12.70 : Demand for US bills in US
model.add('BdUSUS = VUS*(lambda40 + lambda41*RUS - lambda42*(RUK + DXREUK))')
# 12.71 : Demand for UK bills in US
model.add('BdUSUK = VUS*(lambda50 - lambda51*RUS + lambda52*(RUK + DXREUK))')
model.add('HdUS = VUS - BdUSUS - BdUSUK') # 12.72 : Demand for money in US
# Asset Supplies
# --------------
model.add('HsUS = HdUS') # 12.77 : Supply of cash in US
model.add('BsUSUS = BdUSUS') # 12.78 : Supply of US bills to US
model.add('BcbsUSUS = BcbdUSUS') # 12.79 : Supply of US bills to US central bank
model.add('HsUK = HdUK') # 12.80 : Supply of cash in UK
model.add('BsUKUK = BdUKUK') # 12.81 : Bills issued by UK acquired by UK
model.add('BcbsUKUK = BcbdUKUK') # 12.82 : Supply of UK bills to UK central bank
# model.add('BcbsUKUK = BsUK - BsUKUK - BsUSUK')
# 12.83 : Balance sheet of US central bank
model.add('BcbdUSUS = BcbdUSUS(-1) + d(HsUS) - d(ORUS)*PGUS ')
# 12.84 : Balance sheet of UK central bank
model.add('BcbdUKUK = BcbdUKUK(-1) + d(HsUK) - d(BcbsUKUS)*XRUS - d(ORUK)*PGUK')
model.add('PGUK = PGUS/XRUK') # 12.85 : Price of gold is equal in US and UK
model.add('XRUS = 1/XRUK') # 12.86 : US exchange rate
model.add('BsUSUK = BdUSUK*XRUS') # 12.87 : Equilibrium condition for bills issued by UK acquired by US
model.add('BcbdUKUS = BcbsUKUS*XRUS') # 12.88 : Equilibrium conditioin for bills issued by US acquired by UK central bank
# XRUK is exogenous
# model.add('XRUK = BsUKUS/BdUKUS') # 12.89FL :
model.add('BsUKUS = XRUK*BdUKUS') # 12.89F
# 12.90F : Supply of UK bills to us
model.add('BcbsUKUS = BsUS - BsUSUS - BcbdUSUS - BsUKUS')
# Government deficits in the UK
model.add('PSBRUK = GUK + RUK(-1)*BsUK(-1) - TUK - FcbUK')
# Government deficits in the US
model.add('PSBRUS = GUS + RUS(-1)*BsUS(-1) - TUS - FcbUS')
model.add('NAFAUK = PSBRUK + CABUK') # Net accumulation of financial assets in the UK
model.add('NAFAUS = PSBRUS + CABUS') # Net accumulation of financial assets in the US
return model
openfix_parameters = {'alpha1UK': 0.75,
'alpha1US': 0.75,
'alpha2UK': 0.13333,
'alpha2US': 0.13333,
'eps0': -2.1,
'eps1': 0.7,
'eps2': 1,
'lambda10': 0.7,
'lambda11': 5,
'lambda12': 5,
'lambda20': 0.25,
'lambda21': 5,
'lambda22': 5,
'lambda40': 0.7,
'lambda41': 5,
'lambda42': 5,
'lambda50': 0.25,
'lambda51': 5,
'lambda52': 5,
'mu0': -2.1,
'mu1': 0.7,
'mu2': 1,
'nu0m': -0.00001,
'nu0x': -0.00001,
'nu1m': 0.7,
'nu1x': 0.5,
'phiUK': 0.2381,
'phiUS': 0.2381,
'thetaUK': 0.2,
'thetaUS': 0.2,
}
openfix_exogenous = {'BcbsUKUS': 0.02031,
'DXREUS': 0,
'GkUK': 16,
'GkUS': 16,
'ORUK': 7,
'PGUS': 1,
'PRUK': 1.3333,
'PRUS': 1.3333,
'RUK': 0.03,
'RUS': 0.03,
'WUK': 1,
'WUS': 1,
'BcbdUKUK': 0.27984,
'BcbsUKUK': 0.27984,
'BcbdUKUS': 0.0203,
'BcbdUSUS': 0.29843,
'BcbsUSUS': 0.29843,
'BsUK': 138.94,
'BdUKUK': 102.18,
'BsUKUK': 102.18,
'BdUKUS': 36.493,
'BsUKUS': 36.504,
'BsUS': 139.02,
'BdUSUK': 36.497,
'BsUSUK': 36.487,
'BdUSUS': 102.19,
'BsUSUS': 102.19,
'HdUK': 7.2987,
'HsUK': 7.2987,
'HdUS': 7.2995,
'HsUS': 7.2995,
'ORUS': 7,
'VkUK': 152.62,
'VkUS': 152.63,
'VUK': 145.97,
'VUS': 145.99001,
'CkUK': 81.393,
'CkUS': 81.401,
'CABUK': 0,
'CABUS': 0,
'CONSUK': 77.851,
'CONSUS': 77.86,
'DSkUK': 97.393,
'DSkUS': 97.401,
'DSUK': 93.154,
'DSUS': 93.164,
'DXREUK': 0,
'FcbUK': 0.00869,
'FcbUS': 0.00895,
'GUK': 15.304,
'GUS': 15.304,
'IMkUK': 11.928,
'IMkUS': 11.926,
'IMUK': 11.407,
'IMUS': 11.409,
'KABPUK': 0.00002,
'KABPUS': -0.00002,
'NUK': 73.046,
'NUS': 73.054,
'PDSUK': 0.95648,
'PDSUS': 0.95649,
'PGUK': 0.99971,
'PMUK': 0.95628,
'PMUS': 0.95661,
'PSUK': 0.95646,
'PSUS': .9565,
'PXUK': 0.95634,
'PXUS': 0.95656,
'PYUK': 0.95648,
'PYUS': 0.95649,
'SkUK': 109.32,
'SkUS': 109.33,
'SUK': 104.56,
'SUS': 104.57,
'TUK': 19.463,
'TUS': 19.465,
'XkUK': 11.926,
'XkUS': 11.928,
'XUK': 11.406,
'XUS': 11.41,
'XRUK': 1.0003,
'XRUS': 0.99971,
'XREUK': 1.0003,
'XREUS': 0.99971,
'YkUK': 97.392,
'YkUS': 97.403,
'YUK': 93.154,
'YUS': 93.164,
'YDrUK': 77.851,
'YDrUS': 77.86,
'YDhskUK': 81.394,
'YDhskUS': 81.402,
'YDhsekUK': 81.394,
'YDhsekUS': 81.402,
}
In [3]:
baseline = create_openfix_model()
baseline.set_values(openfix_parameters)
baseline.set_values(openfix_exogenous)
# To get the model to converge, I use a different method for solving the set of equations.
for i in xrange(100):
baseline.solve(iterations=200, threshold=1e-4, method='broyden')
In [4]:
eps0 = create_openfix_model()
eps0.set_values(openfix_parameters)
eps0.set_values(openfix_exogenous)
for _ in xrange(10):
eps0.solve(iterations=200, threshold=1e-4, method='broyden')
eps0.set_values({'eps0': -2.0})
for _ in xrange(90):
eps0.solve(iterations=200, threshold=1e-4, method='broyden')
In [5]:
caption = '''
Figure 12.1A Effect of an increase in the US propensity to import on UK variables,
within a fixed exchange rate regime with endogenous foreign reserves: net accumulation
of financial assets, current account balance, trade balance, and government budget
balance.'''
cabdata = [s['CABUK'] for s in eps0.solutions[5:50]]
xidata = [s['XUK'] - s['IMUK'] for s in eps0.solutions[5:50]]
psbrdata = [-s['PSBRUK'] for s in eps0.solutions[5:50]]
nafadata = [s['NAFAUK'] for s in eps0.solutions[5:50]]
fig = plt.figure()
axes = fig.add_axes([0.1, 0.1, 1.1, 1.1])
axes.tick_params(top='off', right='off')
axes.spines['top'].set_visible(False)
axes.spines['right'].set_visible(False)
axes.plot(cabdata, linestyle='-', color='b')
axes.plot(xidata, linestyle='--', linewidth=2, color='g')
axes.plot(psbrdata, linestyle=':', linewidth=2, color='r')
axes.plot(nafadata, linestyle='-.', linewidth=2, color='b')
# add labels
plt.text(10, 1.05, 'UK current account balance')
plt.text(25, 0.6, 'UK trade balance')
plt.text(28, 0.9, 'UK government')
plt.text(28, 0.8, 'budget balance')
plt.text(20, 0.2, 'UK NAFA')
fig.text(0.1, -.15, caption);
In [6]:
caption = '''
Figure 12.1B Effect of an increase in the US propensity to import, within
a fixed exchange rate regime with endogenous foreign reserves, on the
UK current account balance and elements of the balance sheet of the
Bank of England (the UK central bank): change in foreign reserves, stock
of money, holdings of domestic Treasury bills.'''
cabdata = list()
ukukdata = list()
hukdata = list()
ukusdata = list()
for i in xrange(5, 50):
s = eps0.solutions[i]
s_1 = eps0.solutions[i-1]
cabdata.append(s['CABUK'])
ukukdata.append(s['BcbdUKUK'] - s_1['BcbdUKUK'])
hukdata.append(s['HdUK'] - s_1['HdUK'])
ukusdata.append(s['BcbdUKUS'] - s_1['BcbdUKUS'])
fig = plt.figure()
axes = fig.add_axes([0.1, 0.1, 1.1, 1.1])
axes.tick_params(top='off', right='off')
axes.spines['top'].set_visible(False)
axes.spines['right'].set_visible(False)
axes.plot(cabdata, linestyle='-', color='b')
axes.plot(ukukdata, linestyle='--', linewidth=2, color='g')
axes.plot(hukdata, linestyle=':', linewidth=2, color='r')
axes.plot(ukusdata, linestyle='-.', linewidth=2, color='b')
# add labels
plt.text(10, 1.05, 'UK current account balance')
plt.text(5, -0.8, 'Change in the')
plt.text(5, -1.0, 'Bank of England holdings')
plt.text(5, -1.2, 'of domestic Treasury bills')
plt.text(15, -0.2, 'Change in the UK stock of money')
plt.text(15, 0.5, 'Change in the Bank of England foreign reserves')
fig.text(0.1, -.2, caption);
In [7]:
caption = '''
Figure 12.1C Effect of an increase in the US propensity to import on the US debt
to GDP ratio and on the UK debt to income ratio, within a fixed exchange rate
regime with endogenous foreign reserves.'''
usdata = [s['BsUS']/s['YUS'] for s in eps0.solutions[5:50]]
ukdata = [s['BsUK']/s['YUK'] for s in eps0.solutions[5:50]]
fig = plt.figure()
axes = fig.add_axes([0.1, 0.1, 1.1, 1.1])
axes.tick_params(top='off', right='off')
axes.spines['top'].set_visible(False)
axes.spines['right'].set_visible(False)
#axes.set_ylim(37, 45)
axes.plot(ukdata, linestyle='-', color='b')
axes.plot(usdata, linestyle='--', linewidth=2, color='g')
# add labels
plt.text(22, 1.4, 'UK debt to GDP ratio')
plt.text(22, 1.6, 'US debt to GDP ratio')
fig.text(0.1, -.1, caption);
In [ ]: