# An Example of Two-Country Economy with Bond A general equilibrium example of two-country economy with bond. ```r gemTwoCountry_Bond_7_4(...) ``` ## Arguments - `...`: arguments to be passed to the function sdm2. ## Returns A general equilibrium. ## Examples ```r es.DFProd <- 0.8 # the substitution elasticity between domestic and foreign products es.CL <- 0.8 # the substitution elasticity between capital and labor dst.firm.CHN <- node_new("output", type = "SCES", alpha = 1, beta = c(0.78, 0.22), es = es.CL, "lab.CHN", "cap.CHN" ) dst.household.CHN <- node_new("util", type = "FIN", rate = c(1, outbound.investment.rate = 0.028), "cc1", "bond.ROW" ) node_set(dst.household.CHN, "cc1", type = "SCES", alpha = 1, beta = c(0.93, 0.07), es = es.DFProd, "prod.CHN", "prod.ROW" ) node_plot(dst.household.CHN) dst.firm.ROW <- node_new("output", type = "SCES", alpha = 1, beta = c(0.75, 0.25), es = es.CL, "lab.ROW", "cap.ROW" ) dst.household.ROW <- node_new("util", type = "SCES", alpha = 1, beta = c(0.02, 0.98), es = es.DFProd, "prod.CHN", "prod.ROW" ) dstl <- list(dst.firm.CHN, dst.household.CHN, dst.firm.ROW, dst.household.ROW) ge <- sdm2(dstl, names.commodity = c( "prod.CHN", "lab.CHN", "cap.CHN", "prod.ROW", "lab.ROW", "cap.ROW", "bond.ROW" ), names.agent = c( "firm.CHN", "household.CHN", "firm.ROW", "household.ROW" ), B = { tmp <- matrix(0, 7, 4, TRUE) tmp[1, 1] <- tmp[4, 3] <- 1 tmp }, S0Exg = { tmp <- matrix(NA, 7, 4, TRUE) tmp[2, 2] <- 53 # the supply of lab.CHN tmp[3, 2] <- 15 # the supply of cap.CHN tmp[5, 4] <- 240 # the supply of lab.ROW tmp[6, 4] <- 77 # the supply of cap.ROW tmp[7, 4] <- 2 # the supply of bond.ROW tmp }, numeraire = "lab.CHN" ) ge$p ge$z # Determine the parameters in the # example based on an input-output table. IT <- matrix(c( 0, 61.44, 0, 6.498, 53, 0, 0, 0, 14.94, 0, 0, 0, 0, 4.647, 0, 320, 0, 0, 242.9, 0, 0, 0, 81.74, 0, 0, 1.85, 0, 0 ), 7, 4, TRUE) OT <- matrix(c( 67.94, 0, 0, 0, 0, 53, 0, 0, 0, 14.94, 0, 0, 0, 0, 324.64, 0, 0, 0, 0, 242.9, 0, 0, 0, 81.74, 0, 0, 0, 1.85 ), 7, 4, TRUE) dimnames(IT) <- dimnames(OT) <- list( c("prod.CHN", "lab.CHN", "cap.CHN", "prod.ROW", "lab.ROW", "cap.ROW", "bond.ROW"), c("firm.CHN", "household.CHN", "firm.ROW", "household.ROW") ) es.DFProd <- 0.8 # the substitution elasticity between domestic and foreign products es.CL <- 0.8 # the substitution elasticity between capital and labor dst.firm.CHN <- node_new("output", type = "SCES", alpha = OT["prod.CHN", "firm.CHN"] / sum(IT[c("lab.CHN", "cap.CHN"), "firm.CHN"]), beta = prop.table(IT[c("lab.CHN", "cap.CHN"), "firm.CHN"]), es = es.CL, "lab.CHN", "cap.CHN" ) # the amount of outbound investment corresponding to # each unit of composite commodity 1 used by household. outbound.investment.rate <- IT["bond.ROW", "household.CHN"] / sum(IT[c("prod.CHN", "prod.ROW"), "household.CHN"]) dst.household.CHN <- node_new("util", type = "FIN", rate = c(1, outbound.investment.rate), "cc1", "bond.ROW" ) node_set(dst.household.CHN, "cc1", type = "SCES", alpha = 1, beta = prop.table(IT[c("prod.CHN", "prod.ROW"), "household.CHN"]), es = es.DFProd, "prod.CHN", "prod.ROW" ) dst.firm.ROW <- node_new("output", type = "SCES", alpha = 1, beta = prop.table(IT[c("lab.ROW", "cap.ROW"), "firm.ROW"]), es = es.CL, "lab.ROW", "cap.ROW" ) dst.household.ROW <- node_new("util", type = "SCES", alpha = 1, beta = prop.table(IT[c("prod.CHN", "prod.ROW"), "household.ROW"]), es = es.DFProd, "prod.CHN", "prod.ROW" ) dstl <- list(dst.firm.CHN, dst.household.CHN, dst.firm.ROW, dst.household.ROW) ge <- sdm2(dstl, names.commodity = c( "prod.CHN", "lab.CHN", "cap.CHN", "prod.ROW", "lab.ROW", "cap.ROW", "bond.ROW" ), names.agent = c( "firm.CHN", "household.CHN", "firm.ROW", "household.ROW" ), B = { tmp <- matrix(0, 7, 4, TRUE) tmp[1, 1] <- tmp[4, 3] <- 1 tmp }, S0Exg = { tmp <- matrix(NA, 7, 4, TRUE) tmp[2, 2] <- OT["lab.CHN", "household.CHN"] tmp[3, 2] <- OT["cap.CHN", "household.CHN"] tmp[5, 4] <- OT["lab.ROW", "household.ROW"] tmp[6, 4] <- OT["cap.ROW", "household.ROW"] tmp[7, 4] <- OT["bond.ROW", "household.ROW"] tmp }, numeraire = "lab.CHN" ) ge$p ge$z ``` ## See Also gemTwoCountry_Tariff_9_5

gemTwoCountry_Bond_7_4 function