# SimTown

This (work in progress) simulator is designed to give a framework for
writing realistic models of economies, for which various research
questions can be asked.

The basic concept is to create a "circuit of capital", agent based
model of production, with a central bank, banks which take loans at
the overnight rate, but have holdings, firms, which engage in
commodity production, and people, who can obtain money from wages or
from returns to capital.

## Research Questions

There are a number of research questions that a simulation may assist
in providing predictions for, and dynamical understanding of.

1. Can we produce predictions of macro-observables from a
micro-foundation?
    a. Can we predict money supply and velocity?
    b. What are the effects of altering interest rates
    c. Can growth be obtained by biasing loan structure?

2. How does labour supply impact wage structure

3. If we have a fine structure on wages with labour varieties as a
sort of commodity, each of which requires human capital inputs:
    a. What is the effect of subsidy?
    b. How does dispersion of labour value to price relate?

## The Circuit of Capital

We start with a microfoundation of agents, both people and firms. Each
firm employs people at wages.

Production is defined as:

```
    M - C [ L_i + C_j ] - M'
```

All firms are price makers. They must guess a price higher than the
cost of production.

Capital is available on loan from the bank at market rate for
capital. Banks borrow at the overnight rate by the central bank set as
an exogenous parameter.

Firms can take out loans to expand production.

The production matrix is designed with different coefficients for each
enterprise, subject to some constraints (conservation law).

People have to purchase from the commodities such that they satisfy a
maslow style hierarchy. New goods can be created which allow
substitution in the hierarchy.