Model-SIM from Chapter 3 of Wynn Godley and Marc Lavoie's Monetary Economics, adapted for an open economy. The model is stock-flow consistent with only government money--no bills or bonds. No central bank and interest rates do not change. Government spends buying output from the production sector. The production sector is passive turning over all revenue over to households. Households save out of income and spend partially spend out of wealth. Imports and exports pass through the production sector illustrating the idea that consumer households buy from domestic businesses that which they have imported. The model also tracks the sectoral balance flows and changes in equity. Sectoral flows and equity balances match each other dollar for dollar to satisfy the sectoral balances accounting identity (Household Saving - Consumption) + (Business Saving - Expenditure) + (Taxes - Government Spending) - (Exports - Imports) = 0. Since business investment occurs internally to the Business Sector,
This is the model I developed within the scope of my article titled "System dynamics and geometric compromise programming: assessing the impact of entrepreneurship wage subsidies on macroeconomic objectives".
Causal loop representations of macroeconomics taken from the System Dynamics literature contrasted with Forrester's main analysis of social and business organization layers See also Saeed's Forrester Economics IM-183285
WIP to provide an overarching structure to simplify the previous messy insight aggregate of multiple lower scale elements based on Fadhel's substack blog entries esp BRICS WIP in Gene's brain link
