The FINANCE sector

The variables

Vensim name Name Used variables Used parameters Variables using it Initial value Equation
Corporate Borrowing Cost 1/y CBC CCSD NCCR CBCEFCA \(\mathtt{CBC}\left(t\right)=\mathtt{CCSD}\left(t\right)+\mathtt{NCCR}\left(t\right)\)
Corporate Borrowing Cost in 1980 1/y CBC1980 NCCR NBOM NBBM NSR CBCEFCA \(\mathtt{CBC1980}\left(t\right)=\mathtt{NBBM}+\mathtt{NBOM}+\mathtt{NSR}+\mathtt{NCCR}\left(t\right)\)
Central Bank Signal Rate 1/y CBSR CSR CSR TIR 0.02 \(\frac{\mathrm{d}\mathtt{CBSR}\left(t\right)}{\mathrm{d}t}=\mathtt{CSR}\left(t\right)\)
Cost of Capital for Secured Debt 1/y CCSD CCSD TIR NBOM FSRT CCSD CBC WBC 0.04 \(\frac{\mathrm{d}\mathtt{CCSD}\left(t\right)}{\mathrm{d}t}=\frac{\mathtt{NBOM}-\mathtt{CCSD}\left(t\right)+\mathtt{TIR}\left(t\right)}{\mathtt{FSRT}}\)
Change in Signal Rate 1/yy CSR ISR CBSR SRAT CBSR \(\mathtt{CSR}\left(t\right)=\frac{-\mathtt{CBSR}\left(t\right)+\mathtt{ISR}\left(t\right)}{\mathtt{SRAT}}\)
Expected Long Term Inflation 1/y ELTI PI ELTI IEFT ELTI TGIR 0.02 \(\frac{\mathrm{d}\mathtt{ELTI}\left(t\right)}{\mathrm{d}t}=\frac{-\mathtt{ELTI}\left(t\right)+\mathtt{PI}\left(t\right)}{\mathtt{IEFT}}\)
Govmnt Borrowing Cost 1/y GBC TIR GIC TGIR \(\mathtt{GBC}\left(t\right)=\mathtt{TIR}\left(t\right)\)
Indicated Signal Rate 1/y ISR PI PU NSR INSR UT IT UNSR CSR \(\mathtt{ISR}\left(t\right)=\mathtt{NSR}\cdot\left(1+\mathtt{INSR}\cdot\left(-1+\frac{\mathtt{PI}\left(t\right)}{\mathtt{IT}}\right)+\mathtt{UNSR}\cdot\left(-1+\frac{\mathtt{PU}\left(t\right)}{\mathtt{UT}}\right)\right)\)
Normal Corporate Credit Risk 1/y NCCR OGR GRCR CBC CBC1980 \(\mathtt{NCCR}\left(t\right)=0.02\cdot\left(1+\mathtt{GRCR}\cdot\left(-1+33\cdot\mathtt{OGR}\left(t\right)\right)\right)\)
Perceived Inflation CB 1/y PI PI IR IPTCB ELTI PI ISR 0.02 \(\frac{\mathrm{d}\mathtt{PI}\left(t\right)}{\mathrm{d}t}=\frac{-\mathtt{PI}\left(t\right)+\mathtt{IR}\left(t\right)}{\mathtt{IPTCB}}\)
Perceived Unemployment CB (1) PU PU UR UPTCB PU ISR 0.0327 \(\frac{\mathrm{d}\mathtt{PU}\left(t\right)}{\mathrm{d}t}=\frac{-\mathtt{PU}\left(t\right)+\mathtt{UR}\left(t\right)}{\mathtt{UPTCB}}\)
10-yr Govmnt Interest Rate 1/y TGIR ELTI GBC \(\mathtt{TGIR}\left(t\right)=\mathtt{ELTI}\left(t\right)+\mathtt{GBC}\left(t\right)\)
3m Interest Rate 1/y TIR CBSR NBBM CCSD GBC \(\mathtt{TIR}\left(t\right)=\mathtt{NBBM}+\mathtt{CBSR}\left(t\right)\)
Worker Borrowing Cost 1/y WBC CCSD WIC \(\mathtt{WBC}\left(t\right)=\mathtt{CCSD}\left(t\right)\)

The parameters

Vensim name Name Is used by Value
Financial Sector Response Time y FSRT CCSD 1.0
sGReoCR<0: Growth Rate effect on Credit Risk GRCR NCCR 0.0
Inflation Expectation Formation Time y IEFT ELTI 10.0
sINeoSR>0: INflation effect on Signal Rate INSR ISR 0.7
Inflation Perception Time CB y IPTCB PI 1.0
Inflation Target 1/y IT ISR 0.02
Normal Basic Bank Margin 1/y NBBM CBC1980 TIR 0.005
Normal Bank Operating Margin 1/y NBOM CCSD CBC1980 0.015
Normal Signal Rate 1/y NSR CBC1980 ISR 0.02
Signal Rate Adjustment Time y SRAT CSR 1.0
sUNeoSR<0: UNemployment effect on Signal Rate UNSR ISR -1.5
Unemployment Perception Time CB y UPTCB PU 1.0
Unemployment Target UT ISR 0.05