Agent-Based Monetary Models
Interest in a Modern Money System
Simple agent-based, , monetary system teaching models.
Sectoral Balance Approach
A sectoral balances perspective helps us to understand the relations among the monetary spending and income of the three economic system sectors: external (foreign), government and non-government (private domestic) which includes banks and households.
Insight into monetary system events may be drawn from this one accounting identity alone - it says, when appropriately defined, sectoral balances must sum to zero. It is impossible for all sectors (and countries) to run surpluses (to save overall - spend less than their income). For one sector to run a surplus, at least one other sector must run a deficit.
Government sector fiscal balance is either recording surplus or deficit. A surplus will indicate a net positive flow of financial assets from non-government sectors to government. A deficit is a positive net flow of financial assets from government to non-government sectors - this is government net financial asset (domestic private sector financial claims on the government sector) creation by way of state purchasing.
A currency-issuing Government can choose to: