Java Agent-based MacroEconomic Laboratory

Jamel: Credit bubble

Jamel: Home


In this experimentation we introduce an unprofitable firm to the model. (firm productivity is 10 instead of 100 for the other firms). The bank continuously lends to this firm. So the non-profitable firm is engaged in a Ponzi scheme because it can only repay its debt by means of new debts.
For the bank, this scenario means an increase of credit risk. For the whole economy, this scenario means an unwarranted creation of money.

This simulation is commented in this paper.


Parameters:

The random seed:
The productivity of the new firm:
The year of the new firm introduction:

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