A central bank enters the scene. Agent-Based Model Portfolio Choice (ABMPC), an interpretation of G&L's second monetary system model, combines the circular flow approach of ABMSIM with the stock approach.
The model will see household agents make a portfolio choice between non-interest bearing (high-powered) money and a short-duration interest bearing asset (Government bills). The model consumes real-world government expenditure and interest-rate time-series data.
The interest rate offered will affect the composition of a household agent's asset portfolio. That is, the proportion of interest-bearing asset to money an agent will decide to hold. The velocity of bills issued, as identified by ABMSIM government money supply, has correlation to real-world interest-bearing asset yield dynamics.
View the portfolio decision.