Macroeconomic ABM with Banking Instability and Macroprudential Rules

Macroeconomic ABM with Banking Instability and Macroprudential Rules preview image

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_3240047 Rubén Osuna (Author)

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crisis 

Tagged by Rubén Osuna 12 months ago

cycles 

Tagged by Rubén Osuna 12 months ago

macroeconomic 

Tagged by Rubén Osuna 12 months ago

Parent of 1 model: Version 2
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This model is a beta version!

The model has undetected problems and it does not run yet.

Posted 12 months ago

Version 2 now runs

The version 2 runs, but the behaviour of the model is not the expected yet.

Posted 10 months ago

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; Macro Agent Base Model (MABM)
; code written by Rubén Osuna, from the model of Assenza, Gatti, Grazzini et al. (2015) macro ABM (as coded by Elder Silva)


extensions [ matrix r stats ]                               ; calling the R extension and the matrix extension

globals [
  taylor-interest-rate                                      ; the interest rate. Conservative type: only inflation considered. Dual mandate: inflation and output gap. Three mandate: inflation, output gap and credit
  eta1                                                      ; undifferentiated interest rate applied to loans of firms with the retail banks
  eta2                                                      ; interest rate applied to loans of retail banks with the Central Bank
  eta3                                                      ; interest rate applied to deposits of firms in the accounts of the retail banks
  eta4                                                      ; interest rate applied to deposits of retail banks in the accounts of the Central Bank
  GDP                                                       ; sum of consumption, total-investment and public expenditures
  GDP_1                                                     ; GDP of the last period (tick)
  P_GDP                                                     ; potential GDP
  Growth-Rate                                               ; growth rate of the GDP
  Recession-lenght                                          ; how many periods the GDP is decreasing
  Unemployment-Rate                                         ; rate of unemployment
  Total-Consumption                                         ; sum of goods sold by the consumptions firms
  Total-Investment                                          ; sum of total capital sold by the capital production firms
  Goods-Price-Level                                         ; sum (price * qt) / Qt sold
  Goods-Price-Level_1                                       ; the same, for the previous period
  Capital-Price-Level                                       ; sum (price * qt) / Qt sold
  Capital-Price-Level_1                                     ; the same, for the previous period
  Total-Loans-Firms                                         ; sum of loans of retail banks with firms of any kind
  Total-Loans-C-Firms                                       ; sum of loans with the C-Firms
  Total-Loans-K-Firms                                       ; sum of loans with the K-Firms
  Total-Central-Bank-Loans                                  ; sum of loans of the retail banks with the Central Bank
  Total-Loans                                               ; sum of loans in this economy (adding up the previous cathegories)
  Total-Loans_1                                             ; sum of loans in this economy for the previous period
  Total-Client-Loans                                        ; this variable should be equal to Total-Loans, but calculated from banks' variables
  Total-Deposits                                            ; sum of all deposits of the retail banks
  Total-Clients-Accounts                                     ; this variable should be equal to Total-Deposits, but calculated from banks' variables
  Total-Deposits_1                                          ; sum of all deposits of the retail banks, previous period
  Total-Reserves                                            ; sum of all reserves of the retail banks
  Total-Deposits-Workers                                    ; sum of deposit at the bank of the households
  Total-Deposits-Capitalists                                ; sum of deposit at the bank of the capitalists
  Total-Deposits-C-Firms                                    ; sum of deposit at the bank of the C-Firms
  Total-Deposits-K-Firms                                    ; sum of deposit at the bank of the K-Firms
  Total-Interest-Payments                                   ; sum of all interest payments from loaners to retail banks
  Total-Installment-Payments                                ; sum of all installment payments from loaners to retail banks
  C-Firms                                                   ; group of firms producing consumption goods
  K-Firms                                                   ; group of firms producing capital goods
  Workers                                                   ; group of households that offer work time
  Capitalists                                               ; group of households that are owners of firms and banks and do not work for others
  Employed                                                  ; group of workers with an employment
  Unemployed                                                ; group of workers without an employment
  C-Broke                                                   ; number of consumption firms that went broken last period
  K-Broke                                                   ; number of capital production firms that went broken last period
  B-Broke                                                   ; number of banks that went broken last period
  Matrix-C-Firms-Bankruptcy                                 ; input with information that will be used in calculation into R (eq 23)
  Matrix-K-Firms-Bankruptcy                                 ; input with information that will be used in calculation into R (eq 23)
  Matrix-Basel-Buffer                                       ; input with information that will be used in calculation into R (eq 23)
  cpi                                                       ; consumer price index of this period
  cpi_1                                                     ; consumer price index of the previous period
  inflation                                                 ; inflation of this period
  inflation_1                                               ; inflation of the previous period
  Wage-on-GDP                                               ; total salaries as a percentage of the GDP, then wage = Wage-on-GDP * GDP / Number-of-Employees is the wage that keeps that proportion constant
  Wage-on-GDP_1                                             ; total salaries as a percentage of the GDP, then wage = Wage-on-GDP * GDP / Number-of-Employees is the wage that keeps that proportion constant
  Credit-on-GDP                                             ; this is the basic ratio used in the Counter-Cyclical-Capital-Buffer defined in Basel III rules
  Credit-on-GDP_1                                           ; the same from the previous period
  Credit-on-GDP-Gap                                         ; difference between current Credit-on-GDP and the long run trend
  State-budget                                              ; how much money the Government owns at this stick
  State-budget_1                                            ; how much money the Government had the previous period. It is related to the cycle
  Leverage-Banks                                            ; mean leverage of the Banks, the Central Bank has their numbers
  Central-Bank-Own-Capital                                  ; the own capital of the central bank, a liability in its balance
  Account-of-State-at-Central-Bank                          ; Account of the State at the Central Bank
  Monetary-Base                                             ; currency plus total reserves or public debt plus credits o the central bank to retail bank less Account-of-State-at-Central-Bank and the capital of the CB
  Currency                                                  ; bills and coins, the monetary base less total reserves
  Money-Supply                                              ; menetary base multiplied by the money multiplier, which is the inverse of RR, the reserve ratio
  Capital-Buffer                                            ; a % of the new loans acting like reserves
  QEasing?                                                  ; it is automatically set true if three periods of recession are observed
  PublicDebt                                                ; public debt titles sold to the central bank
  PublicDebt_1                                              ; public debt titles sold to the central bank the previous period
  Wage                                                      ; uniform wage paid to the workers by C-Firms and K-Firms
  Wage_1                                                    ; wage of the previous period
  Helped-Households                                         ; how many households are being helped
  Beta_1-C-Firms                                            ; parameter utilized by the banks to calculate the interest rate for the firms (eq 26)
  Beta_2-C-Firms                                            ; parameter utilized by the banks to calculate the interest rate for the firms (eq 26)
  Beta_1-K-Firms                                            ; parameter utilized by the banks to calculate the interest rate for the firms (eq 26)
  Beta_2-K-Firms                                            ; parameter utilized by the banks to calculate the interest rate for the firms (eq 26)
  Mjc                                                       ; parameter utilized in the process "SubF-Call-Matrix-formation", related to C-Firms
  Mjk                                                       ; parameter utilized in the process "SubF-Call-Matrix-formation", related to K-Firms
  Mjb                                                       ; parameter utilized in the process related to the calculation of the Capital Buffer set in Basel III rules
  Current-Number-of-C-Firms                                 ; current number of C-Firms, after losses and entries
  Current-Number-of-K-Firms                                 ; current number of K-Firms, after losses and entries
  Current-Number-of-Workers                                 ; current number of Workers, after losses and entries
  ]

breed                 [ Banks        Bank         ]         ; agent class
breed                 [ Households   Household    ]         ; agent class
breed                 [ Firms        Firm         ]         ; agent class
directed-link-breed   [ Hireds       Hired        ]         ; link used to link firms to the worker
directed-link-breed   [ Owners       Owner        ]         ; link used to link firms and banks to their owner/capitalist
directed-link-breed   [ Bankers      Banker       ]         ; link used for connecting the clients with its bank


Banks-own [
  Clients-Accounts-C-Firms                                  ; the total accounts (deposits) of C-Firms in this bank
  Clients-Accounts-K-Firms                                  ; the total accounts (deposits) of K-Firms in this bank
  Clients-Accounts-Firms                                    ; the sum of the former two variables
  Clients-Accounts-Workers                                  ; the total accounts (deposits) of Workers in this bank
  Clients-Accounts-Capitalists                              ; the total accounts (deposits) of Capitalists in this bank
  Clients-Accounts-Households                               ; the total accounts (deposits) of Households (Workers and Capitalists) in this bank
  Clients-Accounts-at-the-Bank_1                            ; the sum of all previous variables (sum of Firms and Households accounts), previous period
  Clients-Accounts-at-the-Bank                              ; the sum of all previous variables (sum of Firms and Households accounts)
  Clients-Loans-C-Firms                                     ; the total loans of C-Firms in this bank
  Clients-Loans-K-Firms                                     ; the total loans of K-Firms in this bank
  Clients-Loans-with-the-Bank_1                             ; the total loans Firms in this bank, previous period
  Clients-Loans-with-the-Bank                               ; the total loans Firms in this bank
  Available-Credit-Basel2                                   ; maximum available credit under Basel II rules
  Available-Credit-Basel31                                  ; maximum available credit under Basel III rules, Global Capital Framework
  Available-Credit-Basel32                                  ; maximum available credit under Basel III rules, Global Liquidity Requirement
  Available-Credit-Basel                                    ; maximum available credit under Basel rule
  Number-of-Firm-Clients
  Number-of-Household-Clients
  Number-of-Clients
  Own-Reserves                                              ; the reserves of retail banks are deposited in the Central Bank, and they are rewarded with the eta4
  Own-Bank-Capital                                          ; bank own capital
  Need-Cash                                                 ; need of money after production, because the bank has losses and it does not have enough assets for paying it
  Bank-Equity                                               ; Equity is the net worth, the difference between assets and liabilities
  Central-Bank-Loans                                        ; loans from the Central Bank to the Retail Banks
  Profit                                                    ; sum of interest received less the bank losses with their loans
  PBT                                                       ; profits before taxes
  I-Received                                                ; total interest payments of Firms to the Banks
  D-Received                                                ; total installment pays of Firms to the Banks
  Assets                                                    ; total assets of retail banks
  Liabilities                                               ; total liabilities of retail banks
  Overdraft                                                 ; losses of the bank so large than it cannot compensate it with own capital
  Shares                                                    ; the own-bank-capital divided by the total number of capitalists in this economy
  PBT                                                       ; profits before taxes
  ]

Households-own [
  Worker?                                                   ; property of the household, true if it is a worker, false if it is a capitalist
  Employed?                                                 ; property of the household, true if it is employed, false if it is unemployed
  Bankrupt?                                                 ; property of the household, true if the capitalist is broken and become a worker
  Human-Wealth                                              ; variable used in determining how much of the entire wealth will be used for consumption
  Current-Income                                            ; the salary if it is a worker, the profit if it is a capitalist
  Bank-Account-Household                                    ; the total of wealth of the households held with the bank
  Desired-Consumption                                       ; theorical value the household want to consume this period
  Consumption                                               ; real value the household did consumption
  C-Firm-List                                               ; list with the firms the household visited last period
  My-Nearest-Bank                                           ; the nearest bank to the household
  ]

Firms-own [
  C-Firm?                                                   ; property of the firms, yes if it is a consumption production firm, not if is a capital production firm
  Owner?                                                    ; any firm may lose its owner, so this parameter sets the existence of not of an owner at a particular moment
  Price                                                     ; last price practiced by the firm
  Demand                                                    ; last quantity demanded
  Production                                                ; actual production of the firm
  Stock                                                     ; amount available for sales (inventories)
  Delta                                                     ; parameter used to calculate new price
  Number-of-Employees                                       ; actual number of employees of this firm
  Need-of-Employees                                         ; ideal number of employees for this firm
  Vacancy                                                   ; number of opened places at this firm for new workers
  Revenue                                                   ; sum of quantity sold times the price
  Sales                                                     ; sum of quantity sold last period
  Profit                                                    ; revenue less the expenditures, considering taxes
  PBT                                                       ; profits before taxes
  Dividend                                                  ; part of the profit given to the owner, from firms and banks
  Overdraft                                                 ; difference between losses and firm's own resources
  Need-Cash                                                 ; need of money before production starts
  Bank-Account-Firm                                         ; money available at the bank owned by the firms
  Leverage                                                  ; debts of the firm divided by their assets, including the debt, ranging between 0 and 1 (0 is zero debt, and 1, all assets are debt)
  Assets                                                    ; sum deposit at bank and stock available for sales
  Liabilities                                               ; total liabilities of firms
  Equity-C-Firms                                            ; assets minus liabilities, or net worth
  Equity-K-Firms                                            ; assets minus liabilities, or net worth
  eta0                                                      ; taylor-made interest rata calculated for every firm
  Current-Retail-Loans                                      ; loans with the retail banks
  Cases-of-Bankruptcy                                       ; the total number of bankruptcies by this firm
  Probability-of-Bankruptcy                                 ; the probability of dying of the firm
  Available-Credit-Assenza                                  ; maximum available credit under internal risk calculations of the bank
  Interest-Pay                                              ; sum of interest rate payed last period
  Installment-Pay                                           ; sum of the installment payed last period
  T-expected                                                ; the expected life span for this firm
  Capital                                                   ; property of the C-firms, indicate the capital available to be used at the production process
  Desired-Investment                                        ; property of the C-Firms, ideal investment needed
  K-Firm-List                                               ; property of the C-Firms, list with the K-Firms the C-Firms visited last period trying to buy capital goods
  Investment                                                ; property of the C-Firms, capital goods bough last period
  Investment-Memory                                         ; property of the C-firms, parameter utilized to calculate te Desired-Investment
  Util-Capacity                                             ; property of the C-Firms, indicates how much of the Capital had been used
  Stock_t-1                                                 ; Stock available in t-1
  My-Nearest-Bank                                           ; the nearest bank to the firm
  ]


; TO SETUP

to Setup
  clear-all
  ;Setup-Globals
  Short-Setup-Globals
  if Do_We_Have_Banks?                [ Setup-Banks         ]             ; call the setup for banks
  if Do_We_Have_C-Firms?              [ Setup-C-Firms       ]             ; call the setup for C-Firms
  if Do_We_Have_K-Firms?              [ Setup-K-Firms       ]             ; call the setup for K-Firms
  if Do_We_Have_Workers?              [ Setup-Workers       ]             ; call the setup for workers
  if Do_We_Have_Capitalists?          [ Setup-Capitalists   ]             ; call the setup for Capitalists
  reset-ticks                                                             ; netlogo need this
end 

; The setup-globals is not being called. but if it is included into the setup it is not working, because some variable is not a defined global.

to Short-Setup-Globals
  set C-Firms                        Firms      with [     C-Firm? ]                   ; building the group with all C-Firms
  set K-Firms                        Firms      with [ not C-Firm? ]                   ; building the group with all K-firms
  set Capitalists                    Households with [ not Worker?  ]                   ; building the group with all Capitalist
  set Workers                        Households with [    Worker?   ]                   ; building the group with all workers
  if not Random-Seed?               [ random-seed 12345 ]                               ; random seed may or not be used
end 

to Setup-Globals                                                                      ; call the setup for globals
  set taylor-interest-rate              natural-interest-rate                         ; the interest rate set by the central bank
  set GDP                               0                                             ; initial GDP
  set GDP_1                             0                                             ; GDP of the previous period
  set Recession-lenght                  0                                             ; number of periods with GDP falls
  set Unemployment-rate                 0                                             ; initial Unemployment rate
  set Total-Consumption                 0                                             ; initial value of consumption
  set Total-Investment                  0                                             ; initial value of total investment
  set Goods-Price-Level                 1                                             ; initial goods price level, necessary minimum for taking logarithms later
  set Capital-Price-Level               1                                             ; initial capital goods price level, necessary minimum for taking logarithms later
  set Goods-Price-Level_1               0.5                                           ; initial goods price level of the previous period, necessary minimum for taking logarithms later
  set Capital-Price-Level_1             0.5                                           ; initial capital goods price level of the previous period, necessary minimum for taking logarithms later
  set Wage                              Minimum-Wage                                  ; initial value for the wage
  set Wage_1                            0                                             ; initial value for the wage of the previous period
  set cpi                               0                                             ; consumer price index of this period
  set cpi_1                             0                                             ; consumer price index of the previous period
  set inflation                         0                                             ; inflation of this period
  set inflation_1                       0                                             ; inflation of the previous period
  set Wage-on-GDP                       0                                             ; total salaries as a percentage of the GDP, then wage = Wage-on-GDP * GDP / Number-of-Employees is the wage that keeps that proportion constant
  set Wage-on-GDP_1                     0                                             ; total salaries as a percentage of the GDP, then wage = Wage-on-GDP * GDP / Number-of-Employees is the wage that keeps that proportion constant
  set Credit-on-GDP                     0                                             ; this is the basic ratio used in the Counter-Cyclical-Capital-Buffer defined in Basel III rules
  set Credit-on-GDP_1                   0                                             ; this is the basic ratio used in the Counter-Cyclical-Capital-Buffer defined in Basel III rules
  set Total-Loans-Firms                 0                                             ; initial value for total loans of retail banks and firms
  set Total-Loans-C-Firms               0                                             ; initial value for C-loans
  set Total-Loans-K-Firms               0                                             ; initial value for K-loans
  set Total-Central-Bank-Loans          0                                             ; initial value for the total loans of retail banks and central bank
  set Total-Loans                       0                                             ; initial value for the total loans in this economy
  set Total-Loans_1                     0                                             ; sum of loans in this economy for the previous period
  set Total-Deposits-Workers            0                                             ; sum of deposit at the bank of the households
  set Total-Deposits-Capitalists        0                                             ; sum of deposit at the bank of the capitalists
  set Total-Deposits-C-Firms            0                                             ; sum of deposit at the bank of the C-Firms
  set Total-Deposits-K-Firms            0                                             ; sum of deposit at the bank of the K-Firms
  set Total-Deposits                    0                                             ; sum of all deposits of retail banks
  set Total-Deposits_1                  0                                             ; sum of all deposits of retail banks, previous period
  set Total-Reserves                    0                                             ; the reserves of retail banks are deposited in the Central Bank, and they are rewarded with the eta4
  set Total-Interest-Payments           0                                             ; total interest payments of firms to reatail banks for loans received
  set Total-Installment-Payments        0                                             ; total installment payments firms to reatail banks for loans received
  ; the Available-Credit-Basel is a bank propertie, not a global. Need to be relocated to bank setup
  ;set Available-Credit-Basel            0                                             ; this is the credit limit to retail banks from Basel macroprudential rules
  ;set Available-Credit-Basel2           0                                             ; maximum available credit under Basel II rules
  ;set Available-Credit-Basel31          0                                             ; maximum available credit under Basel III rules, Global Capital Framework
  ;set Available-Credit-Basel32          0                                             ; maximum available credit under Basel III rules, Global Liquidity Requirement
  ; ^^^^^^^^ to be relocated
  set State-Budget                      0                                             ; initial value for State-Budget
  set C-Firms                           Firms      with [ C-Firm?        ]            ; building the group with all C-Firms
  set K-Firms                           Firms      with [ not C-Firm?    ]            ; building the group with all K-firms
  set Capitalists                       Households with [ not Worker?    ]            ; building the group with all Capitalist
  set Workers                           Households with [ Worker?        ]            ; building the group with all workers
  set Employed                          Workers    with [ Employed?      ]            ; building the group with all employed workers
  set Unemployed                        Workers    with [ not Employed?  ]            ; building the group with all unemployed workers
  set Helped-Households                 0                                             ; number of households helped by the State
  set Central-Bank-Own-Capital          sum [Initial-equity-of-the-bank ] of Banks    ; the own capital of the central bank, a liability in its balance
  set Account-of-State-at-Central-Bank  0                                             ; Account of the State at the Central Bank
  set Matrix-C-Firms-Bankruptcy         matrix:make-constant  2 Time-Window1 0        ; building the initial matrix which will be used by R-Netlogo later, it is a constant matrix of zeroes with 2 rows and "T-W1" columns
  set Matrix-K-Firms-Bankruptcy         matrix:make-constant  2 Time-Window1 0        ; building the initial matrix which will be used by R-Netlogo later, it is a constant matrix of zeroes with 2 rows and "T-W1" columns
  set Matrix-Basel-Buffer               matrix:make-constant  2 Time-Window2 0        ; building the initial matrix which will be used by R-Netlogo later, it is a constant matrix of zeroes with 2 rows and "T-W2" columns
  set Mjc                               0                                             ; helper with the matrix above
  set Mjk                               0                                             ; helper with the matrix above
  set Mjb                               0                                             ; helper with the matrix above
  set Probability-of-Bankruptcy         0                                             ; probability of a firm of dying, explained by the leverage of that firm
  set PublicDebt                        0                                             ; public debt titles sold to the central bank
  set PublicDebt_1                      0                                             ; public debt titles sold to the central bank the previous period
  if not Random-Seed?                 [ random-seed 12345 ]                           ; random seed may or not be used
end 

to Setup-Banks
    create-Banks Number-of-Banks [                                                 ; create n banks, determined in a global variable
    setxy                                random-xcor random-ycor                   ; place them randomly
    move-to                              one-of patches with [not any? Firms-here] ; if a C-Firm or K-Firm is at the same patch, move the Bank to another empty patch in the setup process
    set shape                           "house"                                    ; just for fun, not necessary for the model, used only for display in HUD netlogo
    set size                             2                                         ; just for fun, not necessary for the model, used only for display in HUD netlogo
    set color                            turquoise                                 ; just for fun, not necessary for the model, used only for display in HUD netlogo
    set Own-Bank-Capital                 Initial-equity-of-the-bank                ; explicit
    set Bank-Equity                      Own-Bank-Capital                          ; this is the initial equity of the bank
    set Clients-Accounts-C-Firms         0                                         ; the total accounts (deposits) of C-Firms in this bank
    set Clients-Accounts-K-Firms         0                                         ; the total accounts (deposits) of K-Firms in this bank
    set Clients-Accounts-Firms           0                                         ; the sum of the former two variables
    set Clients-Accounts-Workers         0                                         ; the total accounts (deposits) of Workers in this bank
    set Clients-Accounts-Capitalists     0                                         ; the total accounts (deposits) of Capitalists in this bank
    set Clients-Accounts-Households      0                                         ; the total accounts (deposits) of Households (Workers and Capitalists) in this bank
    set Clients-Accounts-at-the-Bank_1   0                                         ; the sum of all previous variables (sum of Firms and Households accounts), previous period
    set Clients-Accounts-at-the-Bank     0                                         ; the sum of all previous variables (sum of Firms and Households accounts)
    set Clients-Loans-C-Firms            0                                         ; the total loans of C-Firms in this bank
    set Clients-Loans-K-Firms            0                                         ; the total loans of K-Firms in this bank
    set Clients-Loans-with-the-Bank_1    0                                         ; the total loans Firms in this bank, previous period
    set Clients-Loans-with-the-Bank      0                                         ; the total loans Firms in this bank
    set Number-of-Firm-Clients           0
    set Number-of-Household-Clients      0
    set Number-of-Clients                0
    set Available-Credit-Basel2          0                                         ; maximum available credit under Basel II rules
    set Available-Credit-Basel31         0                                         ; maximum available credit under Basel III rules, Global Capital Framework
    set Available-Credit-Basel32         0                                         ; maximum available credit under Basel III rules, Global Liquidity Requirement
    set Available-Credit-Basel           0                                         ; maximum available credit under Basel rules
    set Own-Reserves                     0                                         ; reserves of the bank, deposits multiplied by the reserve requirement
    set Need-Cash                        0                                         ; initial value for cash needed after production, because heavy losses
    set Profit                           0                                         ; revenue less the expenditures, considering taxes
    set PBT                              0                                         ; profits before taxes
    set I-Received                       0                                         ; local variable
    set D-Received                       0                                         ; local variable
    set Overdraft                        0                                         ; this is the difference betwween own liquid assets and losses
    ; properties relocated from the setup-globals
    set Available-Credit-Basel            0                                             ; this is the credit limit to retail banks from Basel macroprudential rules
    set Available-Credit-Basel2           0                                             ; maximum available credit under Basel II rules
    set Available-Credit-Basel31          0                                             ; maximum available credit under Basel III rules, Global Capital Framework
    set Available-Credit-Basel32          0                                             ; maximum available credit under Basel III rules, Global Liquidity Requirement
    ]
end 

to Setup-C-Firms
   ask n-of Number-of-C-Firms patches [                                       ; this command asks a number of patches controlled by a slider with random coordinates
    sprout-Firms 1 [                                                          ; ask to create one firm at these patches
      move-to one-of patches with [not any? Firms-here]                       ; if a C-Firm and K-Firm are at the same patch, move the K-Firm in the setup process
      set shape                      "factory"                                ; just for fun, not necessary for the model, used only for display in HUD netlogo
      set size                       2                                        ; just for fun, not necessary for the model, used only for display in HUD netlogo
      set color                      orange                                   ; just for fun, not necessary for the model, used only for display in HUD netlogo
      set C-Firm?                    true                                     ; proper of the Firms, true means it is a consumption producer firm
      set Owner?                     true                                     ; this firm will have an owner
      set Price                      2                                        ; initial value for price
      set Capital                    Initial-capital                          ; initial value for capital
      set Stock                      Initial-production-C-firms               ; initial value for stock
      set Production                 Initial-production-C-firms               ; initial value for production
      set Revenue                    0                                        ; initial value for revenue
      set Sales                      0                                        ; initial value for sales
      set Profit                     0                                        ; revenue less the expenditures, considering taxes
      set PBT                        0                                        ; profits before taxes
      set Need-Cash                  0                                        ; initial value for cash needed before production, because lack of liquidity for starting it
      set Cases-of-Bankruptcy        0                                        ; the total number of bankruptcies by this firm
      set Available-Credit-Assenza   0                                        ; maximum available credit under internal risk calculations of the bank
      set Desired-Investment         0                                        ; initial value for desire investment
      set Investment                 0                                        ; initial value for investment
      set Number-of-Employees        0                                        ; initial value for number of employees
      set Need-of-Employees          0                                        ; initial value for desire employees
      set K-Firm-List               [ ]                                       ; setup for the list which will be used to colect the K-Firms visited
      set Vacancy                    0                                        ; initial value for vacancy
      set Bank-Account-Firm          Initial-liquidity-of-Firms               ; initial money deposited at the bank by the firms
      set Investment-Memory          Initial-Capital                          ; initial value for Investment-Memory, parameter utilized to calculate the desire investment
      set Util-Capacity              0                                        ; initial value for util-capacity
      create-banker-from             min-one-of banks [distance myself] [set hidden? true]      ; this create a link between the bank and the capitalist
      set My-Nearest-Bank            min-one-of banks [distance myself]       ; this bank is the same to which the C-Firms is now linked with a "banker" relationship
      ]
    ]
end 

to Setup-K-Firms
   ask n-of Number-of-K-Firms patches  [                                   ; this command asks a number of patches controlled by a slider randomly selected
      sprout-Firms 1 [                                                     ; ask to create one firm in each of those patches
      move-to one-of patches with [not any? Firms-here]                    ; if a C-Firm and K-Firm are at the same patch, move the K-Firm in the setup process
      set shape                      "factory"                             ; just for fun, not necessary for the model, used only for display in HUD netlogo
      set size                       2                                     ; just for fun, not necessary for the model, used only for display in HUD netlogo
      set color                      green                                 ; just for fun, not necessary for the model, used only for display in HUD netlogo
      set C-Firm?                    false                                 ; proper of Firms, false mean it is a capital producer firm
      set Owner?                     true                                  ; this firm will have an owner
      set Price                      2                                     ; initial value for price
      set Stock                      Initial-production-K-firms            ; initial value for stock
      set Production                 Initial-production-K-firms            ; initial value for production
      set Revenue                    0                                     ; initial value for revenue
      set Sales                      0                                     ; initial value for sales
      set Profit                     0                                     ; revenue less the expenditures, considering taxes
      set PBT                        0                                     ; profits before taxes
      set Need-Cash                  0                                     ; initial value for cash needed before production, because lack of liquidity for starting it
      set Cases-of-Bankruptcy        0                                     ; the total number of bankruptcies by this firm
      set Available-Credit-Assenza   0                                     ; maximum available credit under internal risk calculations of the bank
      set Desired-Investment         ""                                    ; not applied to K-Firms
      set Investment                 ""                                    ; not applied to K-Firms
      set Number-of-Employees        0                                     ; initial number for employees
      set Need-of-Employees          0                                     ; initial value for desired employees
      set Vacancy                    0                                     ; initial value for vacancy
      set Bank-Account-Firm          Initial-liquidity-of-Firms            ; initial money deposited at the banks by the firms
      set Investment-Memory          ""                                    ; not applied to K-Firms
      set Util-Capacity              ""                                    ; not applied to K-Firms
      create-banker-from             min-one-of banks [distance myself] [set hidden? true]   ; this create a link between the bank and the capitalist
      set My-Nearest-Bank            min-one-of banks [distance myself]    ; this bank is the same to which the K-Firms is now linked with a "banker" relationship
      ]
    ]
end 

to Setup-Workers
   create-Households Number-of-Workers [
    setxy                            random-xcor random-ycor                   ; the initial position of the worker is random
    set shape                       "person"                                   ; just for fun, not necessary for the model, used only for display in HUD netlogo
    set size                         1.25                                      ; just for fun, not necessary for the model, used only for display in HUD netlogo
    set color                        yellow                                    ; just for fun, not necessary for the model, used only for display in HUD netlogo
    set Worker?                      true                                      ; property of the household, "true" indicates it is a worker
    set Employed?                    false                                     ; all workers are unemployed at the start
    set Human-Wealth                 1                                         ; initial value for Human Wealth, utilized to calculate the consumption process
    set Current-Income               0                                         ; intitial income
    set Bank-Account-Household       Initial-households-personal-assets        ; initial value of deposits at the banks
    set Desired-Consumption          0                                         ; initial value for desired Consumption
    set Consumption                  0                                         ; initial value for Consumption
    set C-Firm-List                 [ ]                                        ; setup for the list which will be used to record the C-Firms visited
    create-banker-from               min-one-of banks [distance myself] [set hidden? true]       ; this create a link between the bank and the capitalist
    set My-Nearest-Bank              min-one-of banks [distance myself]        ; this bank is the same to which the Worker is now linked with a "banker" relationship
   ]
end 

to Setup-Capitalists
   create-Households (Number-of-C-Firms + Number-of-K-Firms) [                ; one capitalist for each firm distributed ramdomly in space
    setxy                           random-xcor random-ycor                   ; the initial position of the worker is random
    set shape                      "person"                                   ; just for fun, not necessary for the model, used only for display in HUD netlogo
    set size                        1.25                                      ; just for fun, not necessary for the model, used only for display in HUD netlogo
    set color                       white                                     ; just for fun, not necessary for the model, used only for display in HUD netlogo
    set Worker?                     false                                     ; proper of the household, false means it is a capitalist
    set Bankrupt?                   false
    set Human-Wealth                1                                         ; initial value for human wealth
    set Current-Income              0                                         ; initial value for current income
    set Bank-Account-Household      Initial-households-personal-assets        ; initial value for deposit at bank
    set Desired-Consumption         0                                         ; initial value for Desired-Consumption, D-C is the budget allocated to consumption
    set Consumption                 0                                         ; initial value of Consumption
    set C-Firm-List                [ ]                                        ; setup for the list which will be used to collect the price of the C-Firms visited
    create-owner-from               one-of Firms with [not any? out-link-neighbors] [set hidden? true] ; this create a link between the firm and the capitalist
    create-banker-from              min-one-of banks [distance myself] [set hidden? true]              ; this create a link between the bank and the capitalist
    set My-Nearest-Bank             min-one-of banks [distance myself]        ; this bank is the same to which the Capitalist is now linked with a "banker" relationship
   ]
end 


; TO GO

to Go
   Function-Job-Market                                            ; this function plays the job market process
   Function-Consumption-Market                                    ; this function plays the consumption market process
   Function-Capital-Market                                        ; this function plays the capital market process
   Function-UpDate-Production                                     ; this function plays the production process

   Function-UpDate-Globals                                        ; this function update the globals
   Function-Cash-Flows-Dividends                                  ; this function update the cash flow and set the dividends

   Function-Credit-Market                                         ; this function update the credit market

   Function-Central-Bank                                          ; this function give loans to the banking system and set macropudential rules and monetary policy
   Function-State-Manage-Budget                                   ; the government appears getting taxes and giving subsidies to families, helping banks and during a crisis period and selling public debt

   Function-Update-System

   tick                                                           ; netlogo needs this because it controlates time
end 



; FUNCTIONS


; TO FUNCTION-JOB-MARKET


To Function-Job-Market                              ; here will be called the subfunctions
  ask Firms [                                       ; reset the firms need for cash and update the desire workers number
      SubF-UpDate-Desired-Workers
      set Need-Cash                    0
  ]

  ask Workers with [Current-Income = 0] [           ; ask workers which do not have a job to look for one
      SubF-Find-a-Job
  ]
  ask Workers  [ set Bank-Account-Household    Bank-Account-Household + Current-Income         ] ; ask workers to update their income
  ask Firms    [ set Bank-Account-Firm         Bank-Account-Firm - Number-of-Employees * wage  ] ; ask firms to update their bank account
end 

to SubF-UpDate-Desired-Workers                                                                                        ; this subfunction update the desired workers
   if C-Firm?  [                                                                                                      ; only C-Firms run this
     set Need-of-Employees   min list Need-of-Employees ((Capital * Productivity-of-capital) / Productivity-of-labor) ; set desire employee considering the capital production restriction (Assenza, Gatti, Grazzini et al. 2015, eq. 5.9)
     if Hiring-Rationality? [                                                                                         ; if this switch is on, the firm will hire employees limited to the Bank-Account-Firm resources
         if Need-of-Employees * Wage > Bank-Account-Firm [                                                            ; if Need-of-Employees multiplied by wage is larger than the Bank-Account, the Need-of-Employees is updated
            set Need-of-Employees      max list 0 (int (Bank-Account-Firm / Wage) + 1)                                ; update the desired employees considering the money available
         ]
     ]
   ]
   set Vacancy                         Need-of-Employees   -   Number-of-Employees     ; opening new vacancies to contract more employees
   while [Vacancy < 0 and Number-of-Employees > 0] [                                   ; if vacancy < 0 the firm needs to fire someone
    ask one-of my-out-hireds [                                                         ; choose one employee
        ask other-end [                                                                ; ask this employee to set...
            set Current-Income         0                                               ; their income as 0, it was fired (die)
            set Employed?              false                                           ; the worker is now unemployed
        ]
    die                                                                                ; "die" means this worker is fired (the link disappears)
    ]
    set Vacancy                        Vacancy               + 1                       ; record the fired worker
    set Number-of-Employees            Number-of-Employees   - 1                       ; update the number of employees after the firing process
   ]
end 

to SubF-Find-a-Job                                                                                    ; this subfunction is used by the worker trying to find a job position
   let extension                             0
   repeat 3 [                                                                                         ; the worker will repeteat the process two times
      if Employed? = true [ stop ]                                                                    ; if the worker finds a job the seach process stops
      let aFirm one-of Firms in-radius (radius-for-employment-search + extension) with [Vacancy > 0 ] ; the worker looks for a firm around him with vacancies
      if aFirm != nobody [
         create-hired-from                   one-of Firms-here [set hidden? true]                     ; this link means the worker has a job in a firm, and the two know about eachother
         set Current-Income                  Wage * (1 - tax1)                                        ; update the current-income of the worker
         set State-Budget                    State-Budget + wage * tax1                               ; the tax on income goes to the State
         set Employed?                       true                                                     ; the worker is employed now
         ask aFirm [
             set Number-of-Employees      Number-of-Employees + 1                             ; update the number of employees
             set Vacancy                  Vacancy             - 1                             ; update the vacancies
         ]
      ]
      if aFirm = nobody [
         set Current-Income                 0
         set extension                      extension + 10                    ; a new search starts widening the radius
      ]
  ]
  if Do_We_Have_State? = true and Employed? = false [
     SubF-Get-Unemployment-Benefits                                ; get unemployment benefits if the worker is unemployed
  ]
end 

to SubF-Get-Unemployment-Benefits
   let Unemployment-Benefit                 Wage * Unemployment-Cover                   ; the unemployment benefits is a fraction (= u-cover) of the wage
   ifelse Do_We_Have_Central-Bank? = true and QEasing? = true [                         ; if there is a Central Bank and Quantitative Easing policy, this authority will buy any amount of Public Debt, so there are no constraints
          set Current-Income                Unemployment-Benefit                        ; if the worker is unemployed and his/her Current income is zero the State pays unemployment benefits
          set State-Budget                  State-Budget - Unemployment-Benefit         ; the tax on income goes to the State
          set Helped-Households             Helped-Households + 1                       ; the total number of households helped is increased
   ] [
          if State-Budget >= Unemployment-Benefit [                                     ; if there is enough budget available the State pays the benefits, and the Central Bank help is unnecessary
             set Current-Income             Unemployment-Benefit                        ; if the worker is unemployed and its Current income is zero the State pays unemployment benefits, a tax free subsidy
             set State-Budget               State-Budget - Unemployment-Benefit         ; the tax on income goes to the State
             set Helped-Households          Helped-Households + 1                       ; the total number of households helped is increased
          ]
   ]
end 



; FUNCTION-CONSUMPTION-MARKET

to Function-Consumption-Market                                           ; here will be called the subfunctions of the consumption market
   ask C-Firms [
       set Demand                      0
       set Sales                       0
       set Revenue                     0
   ]                                                                     ; updating properties of the C-Firms
   ask Households [                                                      ; explicit
       SubF-UpDate-Desired-Consumption                                   ; call subfunction for households update their desired consumption
       SubF-Visit-C-Firms                                                ; call subfunction for households visit firm trying to consume
       if Desired-Consumption > 0 [ SubF-Try-Consume ]                   ; if the household wish to consume something, it tries to buy it
   ]
end 

to SubF-UpDate-Desired-Consumption
   set Human-Wealth                   (Memory-parameter-human-wealth * Human-Wealth) + (1 - Memory-parameter-human-wealth) * Current-Income                          ; update human wealth (eq 2)
   set Desired-Consumption             min list  Bank-Account-Household  ((Fraction-of-wealth-devoted-to-consumption * Bank-Account-Household) + Human-Wealth)       ; update desired consumption, it can not be higher than the money the household has
   set Desired-Consumption             max list  0 Desired-Consumption                                                                                               ; this ensures the desired consumption is not negative
end 

to SubF-Visit-C-Firms                                                                                         ; this subfunction rules the shopping process, visiting the firms
  set C-Firm-List sort-by [ [?1 ?2] -> [Price] of ?1 < [Price] of ?2] C-Firms in-radius 30 with [Stock > 0]   ; we build a list with the C-Firms in the neighborhood ordered by price, assuming the household doesn't have the prices of all C-Firms because of time constraints
end 

to SubF-Try-Consume                                                                              ; the household doesn't take the lowest price...
  let listposition floor random-gamma 1.2 0.66                                                   ; ... but applies a distribution to the ordered list, because information is not perfect, scale = 1/lambda, shape/lamda 1.2/0.66 CDF: 0 (0) 1 (0.39) 2 (0.66) 3 (0.81) 4 (0.90)
  if listposition >= (length C-Firm-List) [set listposition 0]                                   ; in this way we increase the probability of the lowest price, by adding up those cases in which the gamma give us a number larger than the length of the list
  print listposition
  let Selected-C-Firm                          (item listposition C-Firm-List)                   ; auxiliar variable
  let Qtt                                       Desired-Consumption / [Price] of Selected-C-Firm ; total number of consumption goods desired
  let expenses                                  0                                                ; auxiliar variable to update the deposit at bank later
  let new-cons                                  0                                                ; auxiliar variable to record the quantity consumed
  while [Qtt > 0 and empty? C-Firm-List = false] [                                               ; if there is desired-consumption not satisfied and the list of firms is not empty...
        ask Selected-C-Firm [
        ifelse [Stock] of Selected-C-Firm > Qtt [                                                ; if there are enough available goods at the first firm ...
            set Demand                          Demand + Qtt                                     ; update the demand of Selected-Firm
            set Stock                           Stock  - Qtt                                     ; updated the stock of the firm
            set Sales                           Sales  + Qtt                                     ; update the sales
            set Revenue                         Revenue + Price * Qtt                            ; update the revenue
            set Expenses                        Expenses + Price * Qtt * (1 + tax3)              ; update the auxiliar variable, used later to update the household bank account
            set State-Budget                    State-Budget + Price * Qtt * tax3                ; update State's budget considering consumption taxes (tax3)
            set new-cons                        new-cons + Qtt                                   ; update the auxiliar variable to register the qtt consumed
            set Qtt                             0                                                ; means no need to bought anymore
        ] [                                                                                      ; second situation, buying only part at the first firm
            set Sales                           Sales  +  Stock                                  ; update sales
            set Revenue                         Price  *  Stock + Revenue                        ; update revenue
            set expenses                        Price  *  Stock * (1 + tax3) + expenses          ; update auxiliar variable, later used to update the bank account of the household
            set State-Budget                    State-Budget + Price * Stock * tax3              ; update State income
            set new-cons                        new-cons  +  Stock                               ; update stock
            set Qtt                             Qtt  -  Stock                                    ; update auxiliar variable to register the Qtt consumed, Qtt = Qtt - S
            set Stock                           0                                                ; update stock
        ]
        ]
        set C-Firm-List remove-item listposition C-Firm-List                                     ; we remove the Firm with depleted Stock
        set listposition floor random-gamma 1.2 0.66                                             ; the firm don't take the lowest price, but applies a distribution to the list, because information is not perfect, scale = 1/lambda, shape/lamda 1.2/0.66 CDF: 0 (0) 1 (0.39) 2 (0.66) 3 (0.81) 4 (0.90)
        if listposition >= (length C-Firm-List) [set listposition 0]                             ; in this way we increase the probability of the lowest price, by adding up those cases in which the gamma give us a number larger than the length of the list, the maximum length of the list
        set Selected-C-Firm                    (item listposition C-Firm-List)                   ; auxiliar variable, record the quantity that can be bought, DC/Pa
  ]
  set Consumption                               new-cons                                         ; update the Consume of the households, the real value that the household did consume
  set Bank-Account-Household                    Bank-Account-Household - expenses                ; update the bank account of the households with the remaining money after the purchasing process
end 



; FUNCTION-CAPITAL-MARKET

to Function-Capital-Market                                                           ; this function set the rules for the capital goods market
  ask K-Firms [                                                                      ; update K-Firms properties
    set Demand                     0
    set Revenue                    0
    set Sales                      0
  ]
  ask C-Firms [                                                                      ; updating the C-Firms properties
    set Investment                 0
    SubF-UpDate-Investment-Desire                                                    ; call sub-function to update investment
    if Desired-Investment > 0    [ SubF-UpDate-Investment ]                          ; if there is need for investment call the sub-function for investment
  ]
end 

to SubF-UpDate-Investment-Desire                                                                                                                                                   ; sub-function with procedure to update the investment need of a C-Firm
  set Desired-Investment           0                                                                                                                                               ; reset variable
  let rand                         random-float 1                                                                                                                                  ; auxiliar sub-function variable
  if  rand < Probability-of-investing [                                                                                                                                            ; check if it is time to invest, because only a fraction of C-Firms (= probability) can invest
      if ticks > 1 [                                                                                                                                                               ; assure that there is no investment in time equal zero
         set Investment-Memory    (Memory-parameter-investment * Investment-Memory) + (1 - Memory-parameter-investment) * Util-Capacity * Capital                                  ; begin of equation of capital motion (eq 10 & Assenza, Gatti, Grazzini et al. 2015, p. 12)
         set Desired-Investment    max list 0 (( (1 / Desired-capacity-utilization-rate) + (Depreciation-of-capital-C / Probability-of-investing) ) * Investment-Memory - Capital) ; end of equation of capital motion (eq 12 & Assenza, Gatti, Grazzini et al. 2015 eq. 5.7)
      ]
  ]
end 

to SubF-UpDate-Investment                                       ; this subfunction is called when there is need for investment (asking C-Firms)
  if Desired-Investment > 0 [                                   ; just trying to find product in two diferents K-Firms
     SubF-Visit-K-Firms                                         ; make a list with all K-Firms, take note of their prices
     SubF-Buy-Capital                                           ; sub-function used to bought capital
  ]
end 

to SubF-Visit-K-Firms                                                                              ; this subfunction rules the shopping process, visiting the firms
   set K-Firm-List sort-by [ [?1 ?2] -> [Price] of ?1 < [Price] of ?2] K-Firms with [Stock > 0]    ; we build a list with the all the K-Firms ordered by price. We have the prices of all K-Firms because they are few and capital is expensive
end                                                                                                 ; C-Firms have no constraits and they have a complete list and make no mistakes in ordering the prices

to SubF-Buy-Capital                                                                                ; asking C-Firms
  let Selected-K-Firm                           first K-Firm-List                                  ; auxiliar variable
  let Qtt                                       Desired-Consumption / [Price] of Selected-K-Firm   ; total number of consumption goods desired
  let expenses                                  0                                                  ; auxiliar variable to update the deposit at bank later
  let new-inv                                   0                                                  ; auxiliar variable to record the quantity of capital adquired by the C-Firm
  while [Qtt > 0 and empty? K-Firm-List = false] [
        ask Selected-K-Firm [
        ifelse [Stock] of Selected-K-Firm > Qtt [                                           ; if there is not available goods at the first firm ...
            set Demand                          Demand + Qtt                                ; update the demand of Selected-Firm
            set Stock                           Stock  - Qtt                                ; updated the stock of the firm
            set Sales                           Sales  + Qtt                                ; update the sales
            set Revenue                         Revenue + Price * Qtt                       ; update the revenue
            set Expenses                        Expenses + Price * Qtt                      ; update the auxiliar variable, used later to update the household bank account
            set new-inv                         new-inv + Qtt                               ; update the auxiliar variable to register the qtt consumed
            set Qtt                             0                                           ; means no need to bought anymore
        ] [                                                                                 ; second situation, buying only part at the first firm
           set Sales                            Sales  +  Stock                             ; update sales
           set Revenue                          Price  *  Stock + Revenue                   ; update revenue
           set expenses                         Price  *  Stock + Expenses                  ; update auxiliar variable, later used to update the bank account of the household
           set new-inv                          new-inv  +  Stock                           ; update stock
           set Qtt                              Qtt  -  Stock                               ; update auxiliar variable to register the Qtt consumed, Qtt = Qtt - S
           set Stock                            0                                           ; update stock
        ]
        ]
        set K-Firm-List                         remove-item 0 K-Firm-List                   ; we remove the Firm with depleted Stock
        set Selected-K-Firm                     first K-Firm-List                           ; auxiliar variable
  ]
  set Investment                                new-inv                                     ; update the Consumption of the households, the real value that the household did consume
  set Bank-Account-Firm                         Bank-Account-Firm - Expenses                ; update the bank account of the households with the remaining money after the purchasing process
end 



; FUNCTION-UPDATE-PRODUCTION

to Function-UpDate-Production                                                                           ; this function update the production of Firms
    ask K-Firms [                                                                                       ; updating the production of K-Firms (eqs 15, 17 & 18)
        set Production                  Number-of-Employees * Productivity-of-labor                     ; updating actual production
        set Stock                       Stock * (1 - Depreciation-of-capital-K) + Production            ; updating stock, depreciation-of-capital is currently set at 2%, but K firms do not use capital so this is deterioration of unused stocks
        set Bank-Account-Firm           Bank-Account-Firm + Revenue                                     ; update bank account
        set Delta                       Production - Demand                                             ; variable used to decide new production
        ifelse K-Qtt-Function?        [ set Need-of-Employees  Report-K-Update-Need-of-Employees ]      ; if the switcher at HUD is turned on, you have a complex function below
                                      [ set Need-of-Employees  Demand / Productivity-of-labor    ]      ; ... if the switcher at HUD is turned off, you have the easy way, and the demand determines the number of employees
        ifelse K-UpDate-Price?        [ set Price              Report-K-Update-Price             ]      ; if the switcher at HUD is turned on, you have a complex function below
                                      [ set Price              Wage / Productivity-of-labor      ]      ; ... the switcher at HUD is turned off, you have the easy way
    ]
    ask C-Firms [                                                                                                                   ; updating the production of C-Firms
        set Capital                     Capital - Capital * Util-Capacity * Depreciation-of-capital-C + Investment                  ; update the capital avalible for production process (eq 5.5 of Assenza, Gatti, Grazzini et al. 2015)
        set Production                  min list (Number-of-Employees * Productivity-of-labor) (Capital * Productivity-of-capital)  ; update actual production limited by the available capital
        set Stock                       Production                                                                                  ; the C-Goods are perishable, so the actual stock are equal the production
        set Util-Capacity               Production / (Capital * Productivity-of-capital)                                            ; utilized capacity (eq 5.4 of Assenza, Gatti, Grazzini et al. 2015)
        set Bank-Account-Firm           Bank-Account-Firm + Revenue                                                                 ; update bank account
        set Delta                       Production - Demand                                                                         ; variable used to decide new production level
        ifelse C-Qtt-Function?        [ set Need-of-Employees  Report-C-Update-Need-of-Employees ]                                  ; if the switcher at HUD is turned on, you have a complex function below
                                      [ set Need-of-Employees  Demand / Productivity-of-labor    ]                                  ; ... if the switcher at HUD is turned off, you have the easy way
        ifelse C-UpDate-Price?        [ set Price              Report-C-Update-Price             ]                                  ; if the switcher at HUD is turned on, you have a complex function below
                                      [ set Price              Wage / Productivity-of-labor      ]                                  ; ... if the switcher at HUD is turned off, you have the easy way
    ]
end 

to-report Report-C-Update-Price                                                                                                     ; reporting the new price for C-Firms ...
  let N-P                     Price                                                                                                 ; local auxiliar variable
  if  (delta <= 0) and       (Price <  Goods-Price-Level)  [ set N-P  Price * (1 + random-float 1 * Price-adjust-parameter)  ]      ; rule to increase price, approaching it to that of the competitors... the jump is stochastic (eq 5.2 and fig.2 of Assenza, Gatti, Grazzini et al. 2015)
  if  (delta >  0) and       (Price >  Goods-Price-Level)  [ set N-P  Price * (1 - random-float 1 * Price-adjust-parameter)  ]      ; rule to reduce price, approaching it to that of the competitors... the jump is stochastic (eq 5.2 and fig.2 of of Assenza, Gatti, Grazzini et al. 2015)
  report                      N-P                                                                                                   ; report new price
end 

to-report Report-K-Update-Price                                                                                                     ; reporting the new price for K-firms
  let N-P                     Price                                                                                                 ; local auxiliar variable
  if (delta <= 0) and        (Price < Capital-Price-Level) [ set N-P Price * (1 + random-float 1 * Price-adjust-parameter )  ]      ; rule to increase price, approaching it to that of the competitors... the jump is stochastic (eq 6.5 of Assenza, Gatti, Grazzini et al. 2015)
  if (delta >  0) and        (Price > Capital-Price-Level) [ set N-P Price * (1 - random-float 1 * Price-adjust-parameter )  ]      ; rule to reduce price, approaching it to that of the competitors... the jump is stochastic (eq 6.5 of Assenza, Gatti, Grazzini et al. 2015)
  report                      N-P                                                                                                   ; report new price
end 

to-report Report-C-Update-Need-of-Employees                                                                                                         ; reporting new C-Firm needs for employees (eq 14)
  let N-E                     Number-of-Employees                                                                                                   ; local auxiliar variable
  if (delta <= 0) and        (Price >= Goods-Price-Level)  [ set N-E ((Production - Quantity-adjust-parameter * delta) / productivity-of-labor) ]   ; possible condition to increase actual number of employees and production (eq 5.1 and fig.2 of of Assenza, Gatti, Grazzini et al. 2015)
  if (delta >  0) and        (Price <  Goods-Price-Level)  [ set N-E ((Production - Quantity-adjust-parameter * delta) / productivity-of-labor) ]   ; other possible condition reduce actual number of employees and production (eq 5.1 and fig.2 of of Assenza, Gatti, Grazzini et al. 2015)
  report                      N-E                                                                                                                   ; report new desired employees
end                                                                                                                                                  ; if (delta <= 0) and (Price < Goods-Price-Level) or the contrary the production does not change and the prices adjust

to-report Report-K-Update-Need-of-Employees                                                                                                                  ; reporting new need for a C-firm employees
  let N-E                     Number-of-Employees                                                                                                            ; local auxiliar variable
  if (delta <= 0) and        (Price >=  Capital-Price-Level) [ set N-E ((Production - Quantity-adjust-parameter * delta - Stock) / productivity-of-labor) ]  ; possible condition to change actual number of employees and production, but we substract the stock (eq 6.6 of of Assenza, Gatti, Grazzini et al. 2015)
  if (delta >  0) and        (Price <   Capital-Price-Level) [ set N-E ((Production - Quantity-adjust-parameter * delta - Stock) / productivity-of-labor) ]  ; other possible condition to change actual number of employees (eq 6.6 of of Assenza, Gatti, Grazzini et al. 2015)
  report                      N-E                                                                                                                            ; report new need for employees
end 



; UPDATE GLOBALS

to Function-UpDate-Globals                                                                                              ; this function update the globals
  set Unemployment-Rate               1 - ((sum [Number-of-Employees] of Firms) / Number-of-Workers)                    ; update the unemployemnt rate
  set GDP_1                           GDP                                                                               ; store the previous value for the next period
  set GDP                             sum [Production] of Firms - sum [Stock] of K-Firms                                ; update the GDP, sum production - stocks
  if GDP < 0                         [set GDP 1]
  ifelse GDP_1 > GDP [
         set Recession-lenght         Recession-lenght + 1                                                              ; we define here a counter for recessions, to be used later
  ] [
         set Recession-lenght         0                                                                                 ; if there is no recession, the counter is set to zero
  ]
  if ticks > 1 [
     set Growth-Rate                 (GDP - GDP_1) / GDP_1
  ]
  if GDP_1 > GDP and Recession-lenght > 2 [
     set QEasing?   true                                                                                                ; QEasing means Quantitative Easing,and this is a policy that opens unlimited buying of Public Debt
  ]
  if GDP > GDP_1 or Recession-lenght = 0 [
     set QEasing?   false                                                                                               ; QEasing means Quantitative Easing,and this is a policy that opens unlimited buying of Public Debt
  ]
  set Total-Investment                sum [Investment] of C-Firms                                                       ; update investment realized by the C-Firms
  set Total-Consumption               sum [Consumption] of Households                                                   ; update the consumption
  set Total-Loans-Firms               sum [Current-Retail-Loans] of Firms                                               ; update the sum of retail loans, all firms
  set Total-Loans-C-Firms             sum [Current-Retail-Loans] of C-Firms                                             ; update the sum of retail loans for C-Firms
  set Total-Loans-K-Firms             sum [Current-Retail-Loans] of K-Firms                                             ; update the sum of retail loans for K-Firms
  set Total-Deposits-Workers          sum [ Bank-Account-Household ] of Workers                                         ; explicit
  set Total-Deposits-Capitalists      sum [ Bank-Account-Household ] of Capitalists                                     ; explicit
  set Total-Deposits-C-Firms          sum [ Bank-Account-Firm ] of C-firms                                              ; explicit
  set Total-Deposits-K-Firms          sum [ Bank-Account-Firm ] of K-firms                                              ; explicit
  set Total-Deposits_1                Total-Deposits                                                                    ; explicit
  set Total-Deposits                  Total-Deposits-Workers + Total-Deposits-Capitalists + Total-Deposits-C-Firms + Total-Deposits-K-Firms     ; explicit
  set Total-Interest-Payments         sum [ Interest-Pay    ] of Firms                                                  ; explicit
  set Total-Installment-Payments      sum [ Installment-Pay ] of Firms                                                  ; explicit
  set Total-Reserves                  RR * Total-Deposits                                                               ; reserves of the banks deposited at the central bank
  set Goods-Price-Level_1             Goods-Price-Level                                                                 ; store the Goods-Price-Level value for use with adaptative functions
  set Capital-Price-Level_1           Capital-Price-Level                                                               ; store the Capital-Price-Level value for use with adaptative functions
  if sum [Sales] of C-Firms != 0    [ set Goods-Price-Level   sum [ Revenue ] of C-Firms / sum [Sales] of C-Firms ]     ; update the goods price level
  if sum [Sales] of K-Firms != 0    [ set Capital-Price-Level sum [ Revenue ] of K-Firms / sum [Sales] of K-Firms ]     ; update the capital price level
  set Current-Number-of-C-Firms       count C-Firms                                                                     ; current number of C-Firms
  set Current-Number-of-K-Firms       count K-Firms                                                                     ; current number of K-Firms
  set Current-Number-of-Workers       count Workers                                                                     ; current number of Workers
end 



; FUNCTION-CASH-FLOWS AND DIVIDENDS

to Function-Cash-Flows-Dividends                                                                 ; this function sets the payment of dividends and cash-flows adjustments
  ask C-Firms [                                                                                  ; Cash flow of C-Firms
      set PBT     Revenue + Bank-Account-Firm * eta3 - Number-of-Employees * Wage - Desired-Investment * Capital-Price-Level - (annuity-rate + eta0) * Current-Retail-Loans  ; PBT is profits before taxes
      let div     0                                                                              ; auxiliar variable
      if Dividends-Payments? [                                                                            ; HUD control for activating dividends payments
         if PBT > 0 [                                                                            ; if the PBT is positive, the firm pay dividends and taxes
            set Profit                              PBT * (1 - tax2)                             ; the profit is reduced by a tax
            set State-Budget                        State-Budget + PBT * tax2                    ; the State collects the taxes
            set Dividend                            Dividend-payout-ratio * Profit               ; if there was a positive profit, setup dividend, the income of capitalists
            set Bank-Account-Firm                   Bank-Account-Firm - Dividend                 ; reduce the bank account the dividend which will be payed to the capitalist
            set Div                                 Dividend                                     ; auxiliar variable bring the div to the capitalist later
            ask one-of my-out-owners [                                                           ; calling the owner of this firm, where my-out- calls "all links you can use to travel from this node"
                ask other-end [                                                                  ; at other end of the link is the capitalist
                    set Current-Income              div * (1 - tax1)                             ; update the current income, substracting the income taxes
                    set Bank-Account-Household      Bank-Account-Household + Current-Income      ; update the household bank account of the capitalist
                    set State-Budget                State-Budget + div * tax1                    ; the State collects the income taxes on this dividend
               ]                                                                                 ; end asking capitalist
           ]                                                                                     ; end asking link
       ]                                                                                         ; end PBT > 0
       if PBT <=  0 [                                                                            ; if the profit is negative (losses) the problems appear
          set Profit                                PBT                                          ; if the profit was zero or negative, the tax is zero
          ifelse Bank-Account-Firm >= abs Profit [
                 set Bank-Account-Firm              Bank-Account-Firm - abs Profit               ; the losses reduce the bank-account of the firm
          ] [                                                                                    ; if the losses are larger than the bank-account of the firm a bakruptcy process starts
             set Overdraft                          abs Profit - Bank-Account-Firm               ; overdraft are losses not covered by the money available at the bank account
             set Bank-Account-Firm                  0                                            ; the losses deplete the bank account of the firm
             ask one-of my-out-owners [                                                          ; calling the owner of this firm, where my-out- calls "all links you can use to travel from this node"
                 ask other-end [                                                                 ; at other end of the link is the capitalist
                     ifelse Bank-Account-Household >=   Overdraft [
                            set Current-Income             0                                     ; update the current income of the capitalist
                            set Bank-Account-Household     Bank-Account-Household - Overdraft    ; the capitalist of the firm has to recapitalize it using his own bank-account
                 ] [

                     set Bankrupt?                          true
                     SubF-Capitalist-Damnation
            ]                                                                                     ; end the overdraft and liquidation process
                 ]                                                                                         ; end the negative profit process
            ]                                                                                         ; end the dividends distribution process
        ]
      ]
    ]
    ]                                                                                              ; end asking C-Firms

  ask K-Firms [                                                                                  ; Cash flow of K-Firms
    set PBT     Revenue + Bank-Account-Firm * eta3 - Number-of-Employees * Wage - (annuity-rate + eta0) * Current-Retail-Loans     ; PBT is profits before taxes
    let div     0                                                                                ; auxiliar variable
    if Dividends-Payments? [                                                                              ; HUD control for activating dividends payments
       if PBT > 0 [                                                                              ; if the profit is positive, the firm pay dividends and taxes
          set Profit                             PBT * (1 - tax2)                                ; the profit is reduced by a tax
          set State-Budget                       State-Budget + PBT * tax2                       ; the State collects the taxes
          set Dividend                           Dividend-payout-ratio * Profit                  ; if there was a positive profit, setup dividend, the income of capitalists
          set Bank-Account-Firm                  Bank-Account-Firm - Dividend                    ; reduce the bank account by the dividend which will be payed to the capitalist
          set div                                Dividend                                        ; auxiliar variable bring the div to the capitalist later
          ask one-of my-out-owners [                                                             ; calling the owner of this firm, where my-out- calls "all links you can use to travel from this node".
               ask other-end [                                                                   ; at other end of the link is the capitalist
                   set Current-Income            div * (1 - tax1)                                ; update the current income, substracting the income taxes
                   set Bank-Account-Household    Bank-Account-Household + Current-Income         ; update the household bank account
                   set State-Budget              State-Budget + div * tax1                       ; the State collects the taxes
               ]
          ]
       ]
       if PBT <=  0 [                                                                            ; if the profit before taxes is negative (losses) the problems appear
          set Profit                             PBT                                             ; if the profit was zero or negative, the tax is zero
           ifelse Bank-Account-Firm >= abs Profit [
                  set Bank-Account-Firm          Bank-Account-Firm - abs Profit                  ; the losses reduce the bank-account of the firms
           ] [                                                                                   ; if the losses are larger than the bank-account of the firm
           set Overdraft                         abs Profit - Bank-Account-Firm                  ; overdraft are losses not covered by the money available at the Bank Accounts
             set Bank-Account-Firm               0                                               ; the losses deplete the bank-account of the firms
             ask one-of my-out-owners [                                                          ; calling the owner of this firm, where my-out- calls "all links you can use to travel from this node".
                 ask other-end [                                                                 ; at other end of the link is the capitalist
                     let Unassumed-Losses                  Overdraft - Bank-Account-Household    ; the losses not covered by the capitalist's money lead to the dismantlement of the firm
                     if Unassumed-Losses <= 0 [
                        set Current-Income                 0                                     ; update the current income of the capitalist
                        set Bank-Account-Household         Bank-Account-Household - Overdraft    ; the capitalist of the firm has to recapitalize it using his own bank-account
                     ]                                                                           ; end of the procedure of heavy losses in which the capitalist is called for sustaining the firm
                     if Unassumed-Losses > 0 [
                        set Bankrupt?                  true
                        SubF-Capitalist-Damnation
                      ]                                                                          ; end procedure previous to bankruptcy
                ]                                                                                ; end ask capitalist
             ]                                                                                   ; end ask one-of my-out-owners
           ]                                                                                     ; end the overdraft and liquidation process
       ]                                                                                         ; end the negative profit process
       ]                                                                                         ; end the dividends distribution process
  ]                                                                                              ; end asking K-Firms


  ask Banks [                                                                                                          ; Now lets see the cash flow of Banks
    let div                             0                                                                              ; auxiliar variable
    set Clients-Accounts-C-Firms        sum [ Bank-Account-Firm ] of out-banker-neighbors with [C-Firm? = true ]       ; bank accounts of the C-Firms at a particular bank
    set Clients-Accounts-K-Firms        sum [ Bank-Account-Firm ] of out-banker-neighbors with [C-Firm? = false]       ; bank accounts of the K-Firms at a particular bank
    set Clients-Accounts-Firms          Clients-Accounts-C-Firms  + Clients-Accounts-K-Firms                           ; bank accounts of Firms at a particular bank
    set Clients-Accounts-Workers        sum [ Bank-Account-Household ] of out-banker-neighbors with [Worker? = true ]  ; bank accounts of the Workers at a particular bank
    set Clients-Accounts-Capitalists    sum [ Bank-Account-Household ] of out-banker-neighbors with [Worker? = false]  ; bank accounts of the Capitalists at a particular bank
    set Clients-Accounts-Households     Clients-Accounts-Capitalists + Clients-Accounts-Workers                        ; bank accounts of the Households at a particular bank
    set Clients-Accounts-at-the-Bank_1  Clients-Accounts-at-the-Bank
    set Clients-Accounts-at-the-Bank    Clients-Accounts-Firms + Clients-Accounts-Households                           ; total bank accounts of firms and households at a particular bank
    set Clients-Loans-C-Firms           sum [ Current-Retail-Loans ] of out-banker-neighbors with [C-Firm? = true]     ; loans to C-Firms of a particular bank
    set Clients-Loans-K-Firms           sum [ Current-Retail-Loans ] of out-banker-neighbors with [C-Firm? = false]    ; loans to K-Firms of a particular bank
    set Clients-Loans-with-the-Bank_1   Clients-Loans-with-the-Bank
    set Clients-Loans-with-the-Bank     Clients-Loans-K-Firms + Clients-Loans-C-Firms                                  ; total loans to Firms of a particular bank
    set Number-of-Firm-Clients          count out-banker-neighbors with [shape = "factory"]                            ; total number of firm clients (with accounts or loans) with this bank
    set Number-of-Household-Clients     count out-banker-neighbors with [shape = "person"]                             ; total number of household clients (with accounts) with this bank
    set Number-of-Clients               Number-of-Firm-Clients + Number-of-Household-Clients                           ; total number of clients (any kind) with this bank
    set Shares                          Own-Bank-Capital / (Current-Number-of-C-Firms + Current-Number-of-K-Firms)     ; the shares of the bank, one for every capitalist
    set I-Received                      sum [ Interest-Pay         ] of out-banker-neighbors with [shape = "factory"]  ; total interest payments of firms to a particular bank
    set D-Received                      sum [ Installment-Pay      ] of out-banker-neighbors with [shape = "factory"]  ; total installment payments of firms to a particular bank
    set Own-Reserves                    RR * Clients-Accounts-at-the-Bank                                              ; reserves of the banks deposited at the central bank
    set PBT                             I-Received + Own-Reserves * eta4 - Central-Bank-Loans * (eta2 + annuity-rate)  ; the profit income minus expenditures
    if Dividends-Payments? [                                                                                                    ; HUD control for activating dividends payments
       ifelse Profit > 0 [                                                                                             ; if the profit is positive, the firm pay dividends and taxes
           set Profit                                 PBT * (1 - tax2)                                                 ; the profit is reduced by a tax
           set State-budget                           State-budget + Profit * tax2                                     ; the State collects the taxes
           set Dividend                               Dividend-payout-ratio * Profit                                   ; if there was a positive profit, setup dividend, the income of capitalists
           set Own-Bank-Capital                       Own-Bank-Capital + Profit * (1 - tax2) - Dividend                ; reduce the bank account the dividend which will be paid to the capitalist
           set Div                                    Dividend / (Current-Number-of-C-Firms + Current-Number-of-K-Firms) ; calculate dividend as part of the total profit divided by capitalists (everyone have a share)
           ask Capitalists [                                                                                           ; call each of one of the capitalist
               let Number-of-Capitalists              Current-Number-of-C-Firms + Current-Number-of-K-Firms            ; total number of Capitalists
               set Current-Income                     Current-Income + div * (1 - tax1)                                ; increase the income of the capitalist with this new dividend
               set Bank-Account-Household             Bank-Account-Household + div * (1 - tax1)                        ; update the bank account of the capitalist
               set State-Budget                       State-Budget + tax1 * div                                        ; the State gets the income taxes
           ]
           ]  [                                                                                                        ; if the profit is negative (losses) the problems start to show up
           ifelse Own-Bank-Capital >= abs Profit [                                                                     ; the bank has liquidity for compensating the loss
                  set Own-Bank-Capital                Own-Bank-Capital - abs Profit                                    ; the losses reduce the Own-Bank-Capital of the bank
                  ask Capitalists [
                      set Current-Income              Current-Income + 0                                               ; update the current income of the capitalist, but we have to consider this is a secondary source of income for them
                  ]
           ] [                                                                                                         ; if the losses are larger than the Own-Bank-Capital
                  set Overdraft                       abs Profit - Own-Bank-Capital                                    ; overdraft are the losses not covered by the Own-Bank-Capital
                  set Own-Bank-Capital                0                                                                ; the losses deplete the Own-Bank-Capital and then...
                  ifelse Do_We_Have_State? [                                                                           ; untenable losses... if there exist a government and taxes... (we are asking banks)
                         SubF-Call-Rescue-From-State                                                                   ; ...the State goes to rescue the retail bank
                  ] [
                         SubF-Go-Bankruptcy-Banks                                                                      ; but if the State does not exist, the retail bank starts a bankruptcy process
                  ]
           ]                                                                                                           ; end procedure previous to bankruptcy
           ]                                                                                                           ; end of the managing losses process
     ]                                                                                                                 ; end of dividends procedure for banks
   ]                                                                                                                   ; end of ask banks
end 

to SubF-Capitalist-Damnation
   ask Capitalists with [Bankrupt? = true] [
       set Current-Income               0                                     ; update the current income of the capitalist/owner
       set Bank-Account-Household       Initial-households-personal-assets    ; update the bank account of the capitalist/owner
       set Worker?                      true                                  ; the capitalist becomes a worker... life is unfair
       set Employed?                    false                                 ; this worker is unemployed at the start
       set color                        yellow                                ; now you are a worker and look like one
       set size                         1.25
       set Human-Wealth                 1
       set Desired-Consumption          0
       set Consumption                  0
       set C-Firm-List                  [ ]
       ask in-owner-neighbors           [ die ]                                ; and the former firm he/she owned vanishes
       set Current-Number-of-C-Firms    Current-Number-of-C-Firms - 1          ; we correct the number of C-Firms in this economy
   ]                                                                           ; end procedure previous to bankruptcy
end 

to SubF-Call-Rescue-From-State
   if Do_We_Have_Central-Bank? = true and QEasing? = true [                                                                      ; if the Central Bank exists and it buys public debt without limits, all the deficit is converted to government bonds sold to the CB
      set State-Budget                            State-Budget -  Initial-equity-of-the-bank - Overdraft                         ; in this case the government pays the recapitalization of the bank and the unpaid overdraft
      set Own-Bank-Capital                        Initial-equity-of-the-bank
      set Profit                                  0
   ]
   if State-Budget >= (Initial-equity-of-the-bank + Overdraft) and Do_We_Have_Central-Bank? = false [                            ; if the Central Bank does not exist, the State helps the bank only if the budget has enough resources
      set State-Budget                            State-Budget -  Initial-equity-of-the-bank - Overdraft                         ; in this case the government pays the recapitalization of the bank and the unpaid overdraft
      set Own-Bank-Capital                        Initial-equity-of-the-bank
      set Profit                                  0
   ]
   if State-Budget >= (Initial-equity-of-the-bank + Overdraft) and Do_We_Have_Central-Bank? = true and QEasing? = false [        ; if the Central Bank exists but the Quantitative Easing policy is not activated, the State helps the bank only if the budget has enough resources
      set State-Budget                            State-Budget -  Initial-equity-of-the-bank - Overdraft                         ; in this case the government pays the recapitalization of the bank and the unpaid overdraft
      set Own-Bank-Capital                        Initial-equity-of-the-bank
      set Profit                                  0
   ]
   if State-Budget <= (Initial-equity-of-the-bank + Overdraft) and Do_We_Have_Central-Bank? = false [                            ; if the Central Bank does not exist and the State budget has not enough resources...
      SubF-Go-Bankruptcy-Banks                                                                                                   ; ... the bankruptcy process is started
   ]
   if State-Budget <= (Initial-equity-of-the-bank + Overdraft) and Do_We_Have_Central-Bank? = true and QEasing? = false [        ; if the Central Bank exists but the Quantitative Easing policy is not activated and the State budget hasn't enough resources...
      SubF-Go-Bankruptcy-Banks                                                                                                   ; ... the bankruptcy process is started
   ]
end 

to SubF-Go-Bankruptcy-Banks                                                                                               ; this subfunction rules the process for the Bank bankruptcy and rebuilding using capitalits' resources. We ask banks here.
   set B-Broke                                    B-Broke + 1                                                             ; increase the global parameter that counts the broke status
   let Original-Shares                            Initial-equity-of-the-bank / (Current-Number-of-C-Firms + Current-Number-of-K-Firms)    ; the original price of a share, before any serious problem appears
   let Bank-Owners                                Capitalists with [Bank-Account-Household >= Original-Shares]            ; this implies a bail-in, because the capitalits will be forced to buy again one share
   let Broken-Capitalists                         Capitalists with [Bank-Account-Household <  Original-Shares]            ; excluded capitalists are those unable to restitute their share in the banking sector, and their number is adjusted below
   let New-Shares                                 Original-Shares                                                         ; we prepare this instrumental variable for repeated use later
   let New-Shares_1                               0                                                                       ; we prepare this instrumental variable for repeated use later
   while [New-Shares > New-Shares_1] [
         set New-Shares_1                         New-Shares
         set New-Shares                           Initial-equity-of-the-bank / (count Bank-Owners)                        ; the capitalists unable to afford a new share are excluded, but as a consecuence, the price per share increases
         set Bank-Owners                          Capitalists with [Bank-Account-Household >= New-Shares]                 ; this implies a bail-in
         set Broken-Capitalists                   Capitalists with [Bank-Account-Household <  New-Shares]                 ; broken capitalists are unable to restitute their share in the banking sector, and they will lose their "capitalist" status
   ]
   ask  Bank-Owners [
        set Bank-Account-Household                Bank-Account-Household - New-Shares                                     ; update the bank account of the capitalist, reducing the account due to the money used to rebuild the bank
   ]
   ask  Broken-Capitalists [                                                                                              ; the capitalists unable to pay for the bail-in will be broken
        set Bank-Account-Household                0                                                                       ; the capitalist unable to pay for the new shares get broken
        set Worker?                               true                                                                    ; the capitalist is broken, and he/she becomes a poor worker
        set Number-of-Workers                     Number-of-Workers + 1
        set color                                 yellow                                                                  ; just for fun, not necessary for the model, used only for display in HUD netlogo
        set Human-Wealth                          1                                                                       ; initial value for Human Wealth, utilized to calculate the consumption process
        set Current-Income                        0                                                                       ; intitial income
        set Bank-Account-Household                Initial-households-personal-assets                                      ; initial value of deposits at the banks, a vital minimum
        set Desired-Consumption                   0                                                                       ; initial value for desire Consumption
        set Consumption                           0                                                                       ; initial value for Consumption
        set C-Firm-List                          [ ]                                                                      ; setup for the list which will be used to colect the C-Firms visited
        set Employed?                             false                                                                   ; the ex-capitalist is now an unemployed worker and he has to look for an employment... life is hard...
        ask one-of my-in-owners [                                                                                         ; we identify the firm (K or C) previously owned by the broken capitalist... my-in-breed means "all links that you can use to travel to this node".
            ask end1                            [ set Owner? false ]                                                      ; ...the firm at the other end of the link now is deprived of a proper owner
            die                                                                                                           ; the link representing ownership dies, the problem now is looking for a new owner for that orphan firm...
        ]
   ]
   let Newcapitalist                              n-of 1 Workers with-max [ Bank-Account-Household ]                      ; ...the orphan C-Firm or K-Firm needs one new owner, so we ask the worker with the highest savings to buy the Firm and become a capitalist
   ask Newcapitalist [                                                                                                    ; before we proceed to transform a worker into a capitalist, we broke his/her current labor contract with a (different) firm
       ask one-of my-in-hireds [                                                                                          ; the only link of this worker, future capitalist, is the labor contract
           ask other-end [                                                                                                ; we contact with the firm for which this worker is employed
               set Vacancy                        Vacancy + 1                                                             ; the worker leaves, so the firm adjust the vacancies adding an open job to the record
               set Number-of-Employees            Number-of-Employees - 1                                                 ; the firm losses one worker, which now is a capitalist unwilling to work
           ]
           die                                                                                                            ; the link, the labor contract, dies or disappear
       ]
       set shape                                 "person"                                                                 ; the metamorphosis of this person is compplete now... he comes to a new (better) life...
       set size                                   1.25                                                                    ; just for fun, not necessary for the model, used only for display in HUD Netlogo
       set color                                  white                                                                   ; he becomes white as well, the color of wealthy capitalists
       set Worker?                                false                                                                   ; false only means he/she is now a happy capitalist
       set Number-of-Workers                      Number-of-Workers - 1
       create-owner-from                          one-of Firms with [Owner? = false] [set hidden? true]                   ; this command creates a link between the orphan firm and the new capitalist and in this way one will know each other for all the purposes
       ask out-owner-neighbors                  [ set Owner? true ]                                                       ; we identify the (C or K) firm previously owned by the broken capitalist and now owned by the lucky new capitalist...
   ]
end 


; FUNCTION-CREDIT-MARKET: CREDIT AND BANKRUPTCY PROCEDURES

to Function-Credit-Market                                                  ; this function rules the credit market system

   SubF-Call-Matrix-Formation                                              ; function to set the matrix used in R to calculate the life spam of firms

   set C-Broke                         0                                   ; global variable for counting the total number of C-firms that went broke this period
   set K-Broke                         0                                   ; global variable for counting the total number of K-firms that went broke this period

   set Total-Clients-Accounts           sum [ Clients-Accounts-at-the-Bank   ] of Banks                           ; this should be equal to Total-Deposits
   set Total-Client-Loans              sum [ Clients-Loans-with-the-Bank    ] of Banks                           ; this should be equal to Total-Loans-Firms

   ask Firms [                                                             ; firms update their status with the retail bank
       SubF-Update-Installment                                             ; to update the installment
       SubF-Update-Cash-Need                                               ; to update firm cash need
       SubF-Update-Assets                                                  ; to update assets value
       SubF-Update-Leverage                                                ; to update the leverage, all this is used to rule interest rate practiced later
   ]

   ask C-Firms [
       SubF-Ask-for-C-Credit                                               ; checks if this C-firm needs credit, it will be asked in this subfunction
   ]

   ask K-firms [
       SubF-Ask-for-K-Credit                                               ; checks if this K-Firm needs credit, it will be asked in this subfunction
   ]

   ask Banks [                                                             ; the retail bank update the balance after the new was created
       if Do_We_Have_Central-Bank? [
          SubF-Ask-for-Credit-to-Central-Bank                              ; the retail bank asks for credits to the Central Bank if reserves fall bellow the prescribed level
       ]
       set Assets                      max list 0 (Own-Reserves + Clients-Loans-C-Firms + Clients-Loans-K-Firms + Own-Bank-Capital)
       set Liabilities                 max list 0 (Clients-Accounts-Workers + Clients-Accounts-Capitalists + Clients-Accounts-C-Firms + Clients-Accounts-K-Firms + Central-Bank-Loans)
       set Bank-Equity                 Assets - Liabilities
   ]

   set Total-Central-Bank-Loans    sum [Central-Bank-Loans] of Banks       ; global variable that calculates the sum of all Central-Bank-Loans to retail banks

   if C-Broke-Procedure? [                                                 ; switch check if the user want the broke procedure
      ask C-Firms [                                                        ; this rules is for C-firm broke
          if (Cases-of-Bankruptcy > T-Ban) [                               ; check if this firm did not pay their debts with a bank, where T-Ban (= 1, 2 o 4) are the Firm's number of periods unable to make payments before going to bankrupcy
              SubF-Go-Bankruptcy-C-Firms                                   ; subfunction containing the bankruptcy process
          ]
      ]
   ]

   if K-Broke-Procedure? [                                                 ; the same as the C-firm, check above for details
      ask K-Firms [
          if (Cases-of-Bankruptcy > T-Ban) [                               ; check if this firm did not pay their debts with a bank, where T-Ban (= 1, 2 o 4) are the Firm's number of periods unable to make payments before going to bankrupcy
              SubF-Go-Bankruptcy-K-Firms                                   ; subfunction containing the bankruptcy process
          ]
      ]
   ]
end 

to SubF-Call-Matrix-formation                                                                     ; subfunction that manage the R routines
  ask C-Firms [
    set Matrix-C-Firms-Bankruptcy matrix:set-and-report Matrix-C-Firms-Bankruptcy 1 Mjc Leverage  ; update the second row of the matrix with information about C-Firms: every (1, Mjc) element is replaced by Leverage
    ifelse (Cases-of-Bankruptcy < T-Ban)                                                          ; update a position with 0 if the firm is alive, and 1 if the firm went bankrupt
    [ set Matrix-C-Firms-Bankruptcy matrix:set-and-report Matrix-C-Firms-Bankruptcy 0 Mjc 0 ]     ; 0 is the first row, 1 the second row, etc. Mjc is the columns
    [ set Matrix-C-Firms-Bankruptcy matrix:set-and-report Matrix-C-Firms-Bankruptcy 0 Mjc 1 ]     ; 0 is the first row, 1 the second row, etc. Mjc is the columns
    set Mjc Mjc + 1 if Mjc > (Time-Window1 - 1) [ set Mjc 0 ]                                     ; move the matrix element to the next position, so the replacements in the matrix are sequential, and the time-window controls how many observations we'll have
  ]

  ask K-Firms [
    set Matrix-K-Firms-Bankruptcy matrix:set-and-report Matrix-K-Firms-Bankruptcy 1 Mjk Leverage  ; update the matrix with information about the K-firms
    ifelse (Cases-of-Bankruptcy < T-Ban)                                                          ; update a position with 0 if the firm is alive, and 1 if the firm went bankruptcy
    [ set Matrix-K-Firms-Bankruptcy matrix:set-and-report Matrix-K-Firms-Bankruptcy 0 Mjk 0 ]
    [ set Matrix-K-Firms-Bankruptcy matrix:set-and-report Matrix-K-Firms-Bankruptcy 0 Mjk 1 ]
    set Mjk Mjk + 1 if Mjk > (Time-Window1 - 1) [ set Mjk 0 ]                                     ; move the matrix the next position, and the time-window controls how many observations we'll have
  ]

  let A matrix:get-row Matrix-C-Firms-Bankruptcy 0                                                ; create an object with the first row of the matrix, which contains 0s and 1s, if barkrupt or not
  let B matrix:get-row Matrix-C-Firms-Bankruptcy 1                                                ; create an object with the second row of the matrix, which contains the Leverage for every C-Firm

  r:put   "a" A                                                                                   ; call the R and put there the object A
  r:put   "b" B                                                                                   ; call the R and put there the object B
  r:eval  "c <- glm(a ~ b, family = binomial)"                                                    ; call R and ask to solve the logistic function with the inputs A and B, gls stands for "generalized linear model", and binomial implies logit link between "a" and "b"

  let C  r:get "c$coefficients"                                                                   ; call R and the coefficients into object C
  set Beta_1-C-Firms  first C                                                                     ; save the beta-1 for C-firms
  if  Beta_1-C-Firms < (- 25)      [set Beta_1-C-Firms (- 25)]                                    ; assure value into a meaninful range, because the first period there is not enough information
  set Beta_2-C-Firms  last  C                                                                     ; save the beta-2 for C-firms
  if (Beta_2-C-Firms > 0) = false  [ set Beta_2-C-Firms    0 ]                                    ; assure value into a meaninful range, because the first period there is not enough information
  if  Beta_2-C-Firms > 25          [ set Beta_2-C-Firms   25 ]                                    ; assure value into a meaninful range, because the first period there is not enough information

  set A matrix:get-row Matrix-K-Firms-Bankruptcy 0                                                ; create an object with the first row of the matrix, which contains 0s and 1s, if barkrupt or not
  set B matrix:get-row Matrix-K-Firms-Bankruptcy 1                                                ; create an object with the seccond row of the matrix, which contains the Leverage for every K-Firm

  r:put   "a" A                                                                                   ; call the R and put there the object A
  r:put   "b" B                                                                                   ; call the R and put there the object B
  r:eval  "c <- glm(a ~ b, family = binomial)"                                                    ; call R and ask to solve the logistic function with the inputs A and B, gls stands for "generalized linear model", and binomial implies logit link between "a" and "b"

  set C  r:get "c$coefficients"                                                                   ; the same as for the C-Firms, look above for details
  set Beta_1-K-Firms  first C
  if  Beta_1-K-Firms < (- 25)     [ set Beta_1-K-Firms  (- 25) ]
  set Beta_2-K-Firms  last  C
  if (Beta_2-K-Firms > 0) = false [ set Beta_2-K-Firms       0 ]
  if  Beta_2-K-firms > 25         [ set Beta_2-K-Firms      25 ]
end 


; SUBFUNCTIONS FOR UPDATING THE SYSTEM STATE

to SubF-Update-Installment                                                           ; this subfunction update the installment debt with retail banks (we are asking Firms)
  set  Interest-Pay                     0                                            ; reset parameter
  set  Installment-Pay                  0                                            ; reset parameter, the repayment schedule
  if Current-Retail-Loans > 0 [                                                      ; check if exist loan
     ifelse Bank-Account-Firm >= ((annuity-rate + eta0) * Current-Retail-Loans) [    ; check if there is money enough to pay the debts
           set Interest-Pay             eta0 * Current-Retail-Loans                  ; update the parameter with the value will be payed
           set Bank-Account-Firm        Bank-Account-Firm  - interest-pay            ; update parameter
           set Installment-Pay          annuity-rate * Current-Retail-Loans          ; update parameter
           set Bank-Account-Firm        Bank-Account-Firm  - Installment-Pay         ; update parameter
           set Current-Retail-Loans     Current-Retail-Loans - Installment-Pay       ; update parameter
           set Cases-of-Bankruptcy      0                                            ; as the firm pay debts this period, reset the parameter for bankruptcy
           ] [
           set Cases-of-Bankruptcy      Cases-of-Bankruptcy  +  1                    ; if the firm did not had money she will be closer and closer to bankruptcy
           ]                                                                         ; bankruptcy happens when the firm is unable to pay its debt to the bank
  ]
end 

to SubF-Update-Cash-Need                                                             ; subfuntion used for updating the need for cash (loans) before production takes place (need for liquidity)... (we are asking Firms)
  ifelse C-Firm? [
         set Need-Cash         max list 0 (Need-Cash + Number-of-Employees * Wage + Desired-Investment * Capital-Price-Level + (annuity-rate + eta0) * Current-Retail-Loans - Bank-Account-Firm)
  ] [
         set Need-Cash         max list 0 (Need-Cash + Number-of-Employees * Wage + (annuity-rate + eta0) * Current-Retail-Loans - Bank-Account-Firm)
  ]
end 

to SubF-Update-Assets                                                                 ; subfunction to update the assets, which differ from C-Firm to K-Firm type (we are asking Firms)
       ifelse C-Firm? [
              set Assets            max list 0 (Stock * Price  +  Bank-Account-Firm  + Capital * Capital-Price-Level)
              set Liabilities       max list 0 (Current-Retail-Loans)
              set Equity-C-Firms    Assets - Liabilities
       ] [
              set Assets            max list 0 (Stock * Price  +  Bank-Account-Firm)
              set Liabilities       max list 0 (Current-Retail-Loans)
              set Equity-K-Firms    Assets - Liabilities
       ]
end 

to SubF-Update-Leverage                                                               ; updating the leverage of a firm (we are asking Firms)
   if Need-Cash > 0                  [ set Leverage   (Current-Retail-Loans + Need-Cash) / (Assets + Current-Retail-Loans + Need-Cash) ]
   if (Current-Retail-Loans = 0)     [ set Leverage 0 ]
end 



; CREDIT PROCESS

to SubF-Ask-for-C-Credit                                                                                                           ; this subfunction is called when there is need for a loan, we ask C-Firms

   ; how much money the nearest bank may offer as a loan, see eq. 8.11 in Assenza, Gatti, Grazzini et al. 2015
   let Available-Credit-Assenza1  (Bank-loss-parameter * ([Bank-Equity] of My-Nearest-Bank - Probability-of-Bankruptcy * [Clients-Loans-with-the-Bank] of My-Nearest-Bank)) / Probability-of-Bankruptcy
   ; how much money the nearest bank may offer as a loan, see eq. 27 of Elder Silva's document
   let Available-Credit-Assenza2   Bank-loss-parameter * ([Bank-Equity] of My-Nearest-Bank * B-Lev * Risk - [Clients-Loans-with-the-Bank] of My-Nearest-Bank)
   set Available-Credit-Assenza    min (list Available-Credit-Assenza1 Available-Credit-Assenza2)
   let Available-Credit            Available-Credit-Assenza

   if (Need-Cash > 0) and ([Available-Credit-Basel] of My-Nearest-Bank > 0) and (Available-Credit >= Need-Cash) and (Cases-of-Bankruptcy < T-Ban) [                                      ; check if the need of a firm is lower then the available credit
      set Current-Retail-Loans           Current-Retail-Loans  +  Need-Cash                                                        ; updating the loans parameter
      set Bank-Account-Firm              Bank-Account-Firm +  Need-Cash                                                            ; updating the bank account with the money received
      ask My-Nearest-Bank [
          set Available-Credit-Basel     Available-Credit-Basel - Need-Cash
      ]
      set Need-Cash                      0
   ]
   if (Need-Cash > 0) and ([Available-Credit-Basel] of My-Nearest-Bank > 0) and (Available-Credit < Need-Cash) and (Cases-of-Bankruptcy < T-Ban) [                                       ; check if the need of a firm is lower then the available credit
      set Current-Retail-Loans           Current-Retail-Loans + Available-Credit                                                   ; the nearest bank offer a loan up to the limit
      set Bank-Account-Firm              Bank-Account-Firm +  Available-Credit                                                     ; updating the bank account with the money received
      ask My-Nearest-Bank [
          set Available-Credit-Basel     Available-Credit-Basel - Available-Credit
      ]
      set Need-Cash                      Need-Cash - Available-Credit
   ]
   ifelse Update-Interest?             [ SubF-Update-Interest-Retail-C ] [ set eta0  taylor-interest-rate ]                        ; call a subfunction to update the interest rate of this firm
end 

to SubF-Update-Interest-Retail-C                                                                                                   ; update the interest rate of a C-firm
   set Probability-of-Bankruptcy      (1 / (1 + e ^ ( - Beta_1-C-Firms - (Beta_2-C-Firms * leverage))))                            ; save the probability of dying of this C-Firm, and for the Betas see above
   set T-expected                     (1 / Probability-of-Bankruptcy)                                                              ; calculate the life expectation of this firm (eq 24)
   let Numerator                      (1 + (taylor-interest-rate / annuity-rate))                                                  ; local auxiliar variable, first part to calculate the new interest rate
   let Denominator                    ((1 - (1 - annuity-rate) ^ (T-expected + 1)) / annuity-rate)                                 ; // // second part of the new interest rate
   let new-int                        Bank-gross-mark-up * ((numerator / denominator) - annuity-rate)                              ; calculating the new interest rate (eq 26 or 8.8 in Assenza, Gatti, Grazzini et al. 2015)
   set eta0                          (eta0  * (Current-Retail-Loans - Need-Cash) + new-int * Need-Cash) / Current-Retail-Loans     ; update the interest rate as mean of the new and the later interest rate
end 

to SubF-Ask-for-K-Credit                                                                                                                                 ; this subfunction is called when there is need for a loan, C-Firm type

  ; how much money the nearest bank may offer as a loan, see eq. 8.11 in Assenza, Gatti, Grazzini et al. 2015
   let Available-Credit-Assenza1  (Bank-loss-parameter * ([Bank-Equity] of My-Nearest-Bank - Probability-of-Bankruptcy * [Clients-Loans-with-the-Bank] of My-Nearest-Bank)) / Probability-of-Bankruptcy
   ; how much money the nearest bank may offer as a loan, see eq. 27 of Elder Silva's document
   let Available-Credit-Assenza2   Bank-loss-parameter * ([Bank-Equity] of My-Nearest-Bank * B-Lev * Risk - [Clients-Loans-with-the-Bank] of My-Nearest-Bank)
   set Available-Credit-Assenza    min (list Available-Credit-Assenza1 Available-Credit-Assenza2)
   let Available-Credit            Available-Credit-Assenza

   if (Need-Cash > 0) and ([Available-Credit-Basel] of My-Nearest-Bank > 0) and (Available-Credit >= Need-Cash) and (Cases-of-Bankruptcy < T-Ban) [      ; check if the need of a firm is lower then the available credit
      set Current-Retail-Loans           Current-Retail-Loans  +  Need-Cash                                                                              ; updating the loans parameter
      set Bank-Account-Firm              Bank-Account-Firm +  Need-Cash                                                                                  ; updating the bank account with the money received
      ask My-Nearest-Bank [
          set Available-Credit-Basel     Available-Credit-Basel - Need-Cash
      ]
      set Need-Cash                      0
   ]
   if (Need-Cash > 0) and ([Available-Credit-Basel] of My-Nearest-Bank > 0) and (Available-Credit < Need-Cash) and (Cases-of-Bankruptcy < T-Ban) [       ; check if the need of a firm is lower then the available credit
      set Current-Retail-Loans           Current-Retail-Loans + Available-Credit                                                                         ; the nearest bank offer a loan up to the limit
      set Bank-Account-Firm              Bank-Account-Firm + Available-Credit                                                                            ; updating the bank account with the money received
      ask My-Nearest-Bank [
          set Available-Credit-Basel     Available-Credit-Basel - Available-Credit
      ]
      set Need-Cash                      Need-Cash - Available-Credit
   ]
   ifelse Update-Interest?             [ SubF-Update-Interest-Retail-K ] [ set eta0  taylor-interest-rate ]                         ; call a subfunction to update the interest rate of this firm
end 

to SubF-Update-Interest-Retail-K                                                                                                    ; update the interest rate of a K-firm
   set Probability-of-Bankruptcy      (1 / (1 + e ^ ( - Beta_1-K-Firms - (Beta_2-K-Firms * leverage))))                             ; save the probability of dying of this K-Firm, and for the Betas see above
   set T-expected                     (1 / Probability-of-Bankruptcy)                                                               ; calculate the life expectation of this firm (eq 24)
   let Numerator                      (1 + (taylor-interest-rate / annuity-rate))
   let Denominator                   ((1 - (1 - annuity-rate) ^ (T-expected + 1)) / annuity-rate)
   let new-int                         Bank-gross-mark-up * ((numerator / denominator) - annuity-rate)                              ; calculating the new interest rate (eq 26 or 8.9 in Assenza, Gatti, Grazzini et al. 2015)
   set eta0                           (eta0 * (Current-Retail-Loans - Need-Cash) + new-int * Need-Cash) / Current-Retail-Loans
end 

to SubF-Go-Bankruptcy-C-Firms                                                                           ; this subfunction rules the process for the C-firm bankruptcy
  set C-Broke                                      C-Broke + 1                                          ; increase the global parameter which count the broke status
  set Cases-of-Bankruptcy                          0                                                    ; reset the parameter
  ask out-owner-neighbors [                                                                             ; find out who is the owner of this firm
          ifelse Bank-Account-Household >= Initial-liquidity-of-Firms [                                 ; if the owner has enough money for paying the initial capital of the new firm
                 set Bank-Account-Household        Bank-Account-Household - Initial-liquidity-of-Firms  ; update the bank account of the capitalist, reduce the money used to rebuild the firm
                 ask in-owner-neighbors [                                                               ; the owner asks the firm to reset the following variables
                     set Current-Retail-Loans      0                                                    ; reset the parameter
                     if Capital-Destruction?     [ set Capital       Initial-Capital ]                  ; reset the capital of the C-Firm, the input applied to the production of C goods
                     set Bank-Account-Firm         Initial-liquidity-of-Firms                           ; updated the bank account with the money from the capitalist
                 ]
          ] [                                                                                           ; if the owner does not have enough money for paying the initial capital of the firm with problems...
                 set Bank-Account-Household        0                                                    ; ...the owner pay the debts with all his/her current assets
                 set Worker?                       true                                                 ; the capitalist is broken, and he/she becomes a poor worker
                 set Number-of-Workers             Number-of-Workers + 1
                 set color                         yellow                                               ; just for fun, not necessary for the model, used only for display in HUD netlogo
                 set Human-Wealth                  1                                                    ; initial value for Human Wealth, utilized to calculate the consumption process
                 set Current-Income                0                                                    ; intitial income
                 set Bank-Account-Household        Initial-households-personal-assets                   ; initial value of deposits at the banks, a vital minimum
                 set Desired-Consumption           0                                                    ; initial value for desire consume
                 set Consumption                   0                                                    ; initial value for Consumption
                 set C-Firm-List                  [ ]                                                   ; setup for the list which will be used to colect the C-Firms visited
                 set Employed?                     false                                                ; this worker is unemployed for the moment
                 ask in-owner-neighbors [                                                               ; the owner asks the firm to reset the following variables
                     set Current-Retail-Loans      0                                                    ; reset the parameter... in fact this is unnecesary because the firm will die soon...
                     die                                                                                ; ... I warned you about it... the C-Firm dies, and all its links
                     set Number-of-C-Firms         Number-of-C-Firms - 1
                 ]
         ]
  ]                                                                                                     ; end asking the owner
end 

to SubF-Go-Bankruptcy-K-Firms                                                                           ; this subfunction rules the process for the K-firm bankruptcy
  set K-Broke                                     K-Broke + 1                                           ; increase the global parameter which count the broke status
  set Cases-of-Bankruptcy                         0                                                     ; reset the parameter
  ask out-owner-neighbors [                                                                             ; find out who is the owner of this firm... there is only one
          ifelse Bank-Account-Household >= Initial-liquidity-of-Firms [                                 ; if the owner has enough money for paying the initial capital of the new firm
                 set Bank-Account-Household       Bank-Account-Household - Initial-liquidity-of-Firms   ; update the bank account of the capitalist, reduce the money used to rebuild the firm
                 ask in-owner-neighbors [                                                               ; the owner asks the firm to reset these variables
                     set Current-Retail-Loans     0                                                     ; reset the parameter
                     set Bank-Account-Firm        Initial-liquidity-of-Firms                            ; updated the bank account with the money from the capitalist
                 ]
          ] [                                                                                           ; if the owner does not have enough money for paying the initial capital of the firm with problems...
                 set Bank-Account-Household       0                                                     ; ...the owner pay the debts with all his/her current assets
                 set Worker?                      true                                                  ; the capitalist is broken, and he/she becomes a poor worker
                 set Number-of-Workers            Number-of-Workers + 1
                 set color                        yellow                                                ; just for fun, not necessary for the model, used only for display in HUD netlogo
                 set Human-Wealth                 1                                                     ; initial value for Human Wealth, utilized to calculate the consumption process
                 set Current-Income               0                                                     ; intitial income
                 set Bank-Account-Household       Initial-households-personal-assets                    ; initial value of deposits at the banks, a vital minimum
                 set Desired-Consumption          0                                                     ; initial value for desire Consumption
                 set Consumption                  0                                                     ; initial value for Consumption
                 set C-Firm-List                 [ ]                                                    ; setup for the list which will be used to colect the C-Firms visited
                 set Employed?                    false                                                 ; this worker is unemployed for the moment
                 ask in-owner-neighbors [                                                               ; the owner asks the firm to reset these variables
                     set Current-Retail-Loans     0                                                     ; reset the parameter... in fact this is unnecesary because the K-Firm will die soon...
                     die                                                                                ; ... I warned you about it... the K-Firm dies, and all its links
                     set Current-Number-of-K-Firms        Current-Number-of-K-Firms - 1
                 ]
         ]
  ]                                                                                                     ; end asking the owner
end 

to SubF-Ask-for-Credit-to-Central-Bank                                                                  ; this subfunction is called when the retail bank needs for a loan due to liquidity problems
   if Own-Reserves / Clients-Accounts-at-the-Bank_1 < RR [
      let Needed-Liquidity                        Clients-Accounts-at-the-Bank_1 * RR - Own-Reserves
      set Central-Bank-Loans                      Central-Bank-Loans + Needed-Liquidity
   ]
end 




; FUNCTION-CENTRAL-BANK: SETTING INTEREST RATE AND CONDITIONS FOR THE LOANS TO THE RETAIL BANKS

to Function-Central-Bank
   SubF-Set-Interest-Rates                           ; different interest rates are calculated by the central bank
   SubF-Set-Macroprudential-Rules                    ; a set of macroprudential rules included in the Basel III catalogue
end 

to SubF-Set-Interest-Rates
   set Total-Loans_1             Total-Loans
   set Total-Loans               Total-Loans-Firms + Total-Central-Bank-Loans
   set inflation_1               inflation                                                                                                                                                              ; store the inflation value for use with adaptative functions
   set inflation                 ((ln Goods-Price-Level - ln Goods-Price-Level_1) + (ln Capital-Price-Level - ln Capital-Price-Level_1))                                                                ; this approximation with logarithms is good only if the rate is close to zero
   set P_GDP                     Productivity-of-labor * Number-of-Workers                                                                                                                              ; P_GDP is potential GDP, and this is the maximum production, by using all resources (Unemployment = 0)
   let sensity_inflation         Taylor-rule-parameter-for-inflation * (inflation - desired-inflation)                                                                                                  ; Taylor-rule-parameter-for-inflation & Desire-inflation-for-the-monetary-authority
   let sensity_product           Taylor-rule-parameter-for-product   * (ln GDP - ln P_GDP)                                                                                                              ; Taylor-rule-parameter-for-product
   let sensity_credit            Taylor-rule-parameter-for-credit    * (ln Total-Loans - ln Total-Loans_1)                                                                                              ; the parameter for the credit component of the Taylor rule
   if taylor-rule = "conservative" [
   set taylor-interest-rate    max list 0.01 ( (inflation + natural-interest-rate + sensity_inflation) * (Slow_taylor) + (1 - slow_taylor) * taylor-interest-rate )                                     ; conservative Taylor rule: inflation (eq 18 of Popoyan et al)
   ]
   if taylor-rule = "dual-mandate" [
   set taylor-interest-rate    max list 0.01 ( (inflation + natural-interest-rate + sensity_inflation + sensity_product) * (Slow_taylor) + (1 - slow_taylor) * taylor-interest-rate )                   ; dual mandate Taylor rule: inflation and output gap (eq 30 of Silva or eq 19 of Popoyan et al)
   ]
   if taylor-rule = "three-mandate" [
   set taylor-interest-rate    max list 0.01 ( (inflation + natural-interest-rate + sensity_inflation + sensity_product + sensity_credit) * (Slow_taylor) + (1 - slow_taylor) * taylor-interest-rate )  ; three-mandate Taylor rule: inflation, output gap and credit (eq 20 of Popoyan et al)
   ]
end 

to SubF-Set-Macroprudential-Rules                                                                     ; we follow here Popoyan et al (2017), pp. 120-121 and 125-127

   ; First, we prepare the global variables needed below

   set Credit-on-GDP_1                             Credit-on-GDP                                      ; we store the value of the previous period
   set Credit-on-GDP                               Total-Loans-Firms / GDP                            ; this is the basic ratio used in the Counter-Cyclical-Capital-Buffer defined in Basel III rules
   let Credit-on-GDP_bis                           Total-Client-Loans / GDP                           ; this is a different way for the same result, and we should see Credit-on-GDP = Credit-on-GDP_bis
   set Matrix-Basel-Buffer matrix:set-and-report Matrix-Basel-Buffer 0 Mjb Credit-on-GDP              ; update the first row of the matrix with information about the explained variable: every (0, Mjb) element is replaced by Credit-on-GDP of the current period
   set Matrix-Basel-Buffer matrix:set-and-report Matrix-Basel-Buffer 1 Mjb ticks                      ; update the second row of the matrix with information about the explicative variable: every (1, Mjb) element is replaced by Credit-on-GDP of the previous period
   set Mjb Mjb + 1 if Mjb > (Time-Window2 - 1) [ set Mjb 0 ]                                          ; move the matrix element to the next position, so the replacements in the matrix are sequential, and the time-window controls how many observations we'll have

   let A matrix:get-row Matrix-Basel-Buffer 0                                                         ; create an object with the first row (0) of the matrix, which contains current Credit-on-GDP
   let B matrix:get-row Matrix-Basel-Buffer 1                                                         ; create an object with the second row (1) of the matrix, which contains Credit-on-GDP of the previous period

   r:put   "a" A                                                                                      ; call R and put there the object A
   r:put   "b" B                                                                                      ; call R and put there the object B
   r:eval  "c <- lm(a ~ b)"                                                                           ; call R and ask to solve the OLS regression with the inputs A and B, lm stands for "linear model". The OLS regression is Credit-on-GDP = a + b * ticks + e

   let C    r:get "c$fitted.values"                                                                   ; call R and put the fitted values into an object C, which is a list
   let long-Run-Credit-on-GDP  last C                                                                 ; save the last fitted value as a new variable used in the calculation of the gap
   set Credit-on-GDP-Gap                           Credit-on-GDP - long-Run-Credit-on-GDP             ; we create the gap variable here... and then we proceeed to the calculation of the capital buffer


   ; Now we start with the definition of the macroprudential rules and their implications for the available credit of banks

   ask Banks [                                                                                                                ; this is important because the rules are applied to a macro scale but also to a micro scale, for every bank
       if Macroprudential-Rules = "basel2" [                                                                                  ; we have created a chooser called "macroprudential-rules" with several possibilities: basel2, basel31, basel32, basel312
          set Available-Credit-Basel2              max (list 0 (Own-Bank-Capital * 12.5 - Clients-Loans-with-the-Bank))       ; available-credit = Own-Bank-Capital * 12.5 - Total-Loans-Firms, the maximum limit minus the current level of loans
          let Minimum-Capital-Requirement-Basel2   Own-Bank-Capital / (Clients-Loans-with-the-Bank + available-credit-basel2) ; Basel II sets this ratio as 8% as a minimum
          set Available-Credit-Basel               Available-Credit-Basel2                                                    ; Available-Credit-Assenza are the particular constraints of the bank to new loans, and it is combined with Available-Credit-Basel determined by monetary authorities
       ]

       if Macroprudential-Rules = "basel3_1" [
          let Available-Credit-Basel31a            max (list 0 (Own-Bank-Capital * 22.2 - Clients-Loans-with-the-Bank))          ; available-credit = Own-Bank-Capital * 22.2 - Total-Loans-Firms, the maximum limit minus the current level of loans
          let Minimum-Capital-Requirement-Basel3   Own-Bank-Capital / (Clients-Loans-with-the-Bank + Available-Credit-Basel31a)  ; Basel II sets this ratio as 4,5% as a minimum

          let Available-Credit-Basel31b            0
          set Capital-Buffer                       0
          let Buffer-Add-On                        0

          if Credit-on-GDP-Gap < 2 [
             set Capital-Buffer                    0                                                                                   ; there is no buffer here, and therefore there are no specific constraits on new available-credits. The capital Buffer is a percentage on Total-Loans-Firms.
             set Buffer-Add-On                     0                                                                                   ; the Capital Buffer is a % of the Total-Loans-Firms not available for firms, this is, for each $ loaned this % must be reserved as a buffer...
          ]                                                                                                                            ; end of first case
          if Credit-on-GDP-Gap <= 10 and Credit-on-GDP-Gap >= 2 [
             set Capital-Buffer                    max (list 0 ((Credit-on-GDP-Gap - 2) * 0.003125))                                   ; 0.003125 = 0.025 / 8 and from here we have a range of values for the Capital-Buffer... (Total-Loans-Firms + Available-Credit-Basel32)
             set Available-Credit-Basel31b        (Clients-Accounts-at-the-Bank + Own-Bank-Capital + Central-Bank-Loans - Own-Reserves - Clients-Loans-with-the-Bank - Clients-Loans-with-the-Bank * Capital-Buffer) / (1 + Capital-Buffer)          ; Deposits-Total includes Own-Bank-Capital
             set Buffer-Add-On                     Capital-Buffer * (Clients-Loans-with-the-Bank + Available-Credit-Basel31b)          ; the aggregate constraint is (Deposits-Total + Central-Bank-Loans + Own-Capital-Bank - Reserves - Total-Loans-Firms - Buffer-Add-On) = Available-Credit-Basel31b
          ]                                                                                                                            ; and aggregate Buffer-Add-On = Capital-Buffer * (Total-Loans-Firms + Available-Credit-Basel31)...
          if Credit-on-GDP-Gap > 10 [
             set Capital-Buffer                    0.025
             set Available-Credit-Basel31b         max (list 0 ((Clients-Accounts-at-the-Bank + Own-Bank-Capital + Central-Bank-Loans - Own-Reserves - Clients-Loans-with-the-Bank - Clients-Loans-with-the-Bank * Capital-Buffer) / (1 + Capital-Buffer)))     ; Deposits-Total includes Own-Bank-Capital
             set Buffer-Add-On                     Capital-Buffer * (Clients-Loans-with-the-Bank + Available-Credit-Basel31b)          ; the aggregate constraint is (Deposits-Total + Total-Central-Bank-Loans + sum (Own-Capital-Bank) - Reserves - Total-Loans-Firms - Buffer-Add-On) = Available-Credit-Basel31b
          ]                                                                                                                            ; end of third case


          let Leverage-Requirement-Basel3          Own-Bank-Capital / Assets                                                           ; this is the third ratio of the first macroprudential rule of Basel III, and the ratio has to be equal to or higher than 3%
          let Available-Credit-Basel31c            max (list 0 ((Own-Bank-Capital - 0.03 * Assets) / 0.03))                            ; 0.03 = Own-Bank-Capital / (Assets of Banks + Available-Credit-Basel31c) and therefore...

          set Available-Credit-Basel31             min (list Available-Credit-Basel31a Available-Credit-Basel31b Available-Credit-Basel31c)
          set Available-Credit-Basel               Available-Credit-Basel31
       ]

       if Macroprudential-Rules = "basel3_2" [
           let High-Quality-Liquid-Assets         (Own-Reserves + Own-Bank-Capital) * 1.75
           set Available-Credit-Basel32           (High-Quality-Liquid-Assets - (taylor-interest-rate + annuity-rate) * Central-Bank-Loans - 0.1 * Clients-Accounts-at-the-Bank - 0.25 * Central-Bank-Loans + I-Received + D-Received - 0.5 * Clients-Loans-with-the-Bank) * 2
           let Expected-Net-Cash-Outflows         (taylor-interest-rate + annuity-rate) * Central-Bank-Loans + 0.1 * Clients-Accounts-at-the-Bank + 0.25 * Central-Bank-Loans - I-Received - D-Received + 0.5 * (Clients-Loans-with-the-Bank + Available-Credit-Basel32)
           let Liquidity-Coverage-Ratio            High-Quality-Liquid-Assets / Expected-Net-Cash-Outflows                             ; Liquidity-Coverage-Ratio >= 1
           set Available-Credit-Basel              Available-Credit-Basel32
       ]

       if Macroprudential-Rules = "basel3_12" [
           set Available-Credit-Basel              min (list Available-Credit-Basel31 Available-Credit-Basel32)
       ]
   ]
end 







; FUNCTION-CALL-STATE

to Function-State-Manage-Budget                                                                                         ; the State get taxes, sells PublicDebt to the Central Bank if there is a deficit and buys PublicDebt to the Central Bank if there is a superavit and pays unemployment benefits
   set State-Budget                               State-Budget - PublicDebt * (taylor-interest-rate * annuity-rate)     ; the unemploymet benefits was substracted from the State Budget when the State paid for it
   let State-Budget-Balance                       State-Budget                                                          ; we record the budget balance
   let State-Budget-Balance_1                     State-Budget-Balance                                                  ; we store the surplus or deficit of this period
   if State-Budget-Balance < 0 and Do_We_Have_Central-Bank? = true and QEasing? = true [                                ; if the Central Bank exists and it buys public debt without limits, all the deficit is converted to government bonds sold to the CB
      set PublicDebt                              PublicDebt + abs State-Budget                                         ; new debt is added to the existing
      set State-Budget                            0                                                                     ; when the deficit is covered, the State budget is in equilibrium
   ]                                                                                                                    ; if the Quantitative Easing is not activated the State Budget cannot be negative (we might consider a constraint of 3% of deficit instead of 0%)
   if State-Budget-Balance > 0 and PublicDebt > 0 and PublicDebt >= State-Budget-Balance and Do_We_Have_Central-Bank? = true [                         ; if the Central Bank exists and there is a surplus...
      set PublicDebt                              PublicDebt - State-Budget                                             ; new debt is added to the existing
      set State-Budget                            0                                                                     ; when the deficit is covered, the State budget is in equilibrium
   ]                                                                                                                    ; end of this case
   if State-Budget-Balance > 0 and PublicDebt >= 0 and PublicDebt < State-Budget-Balance and Do_We_Have_Central-Bank? = true [                         ; if the Central Bank exists and there is a surplus...
      set State-Budget                            State-Budget-Balance - PublicDebt                                     ; new debt is added to the existing
      set PublicDebt                              0                                                                     ; the public debt is cancelled
      set Account-of-State-at-Central-Bank        Account-of-State-at-Central-Bank + State-Budget                       ; the surplus goes to the account of the State at the Central Bank, and this reduces the amount of money in the system
      set State-Budget                            0                                                                     ; when the surplus is applied, the State budget is in equilibrium
   ]                                                                                                                    ; end of this case
end 

to Function-Update-System
   SubF-Update-Wages
   SubF-Update-Monetary-Variables
   SubF-Entry-New-Firms
end 




 To SubF-Update-Wages                                                                           ; this subfunction adjusts wages depending on unempleyment rate, and this wage is applied to the next period
   set cpi_1           cpi                                                                      ; store the cpi value for use with adaptative functions... it is a global variable
   set cpi             ln Goods-Price-Level - ln Goods-Price-Level_1                            ; cpi is the consumer prince index, user for indexing salaries
   set Wage-on-GDP_1   Wage-on-GDP                                                              ; store the Wage-on-GDP value for use with adaptative functions
   set Wage-on-GDP    (sum [Number-of-Employees] of Firms * Wage) / GDP                             ; total salaries as a percentage of the GDP, then Wage = (Wage-on-GDP * GDP) / Number-of-Employees is the wage that keeps that proportion constant
   set Wage_1          Wage                                                                     ; store the Wage value for use with adaptative functions
   ifelse Unemployment-Rate <= frictional-unemployment-rate + 3 [                               ; if the unemployment rate approaches the frictional unemployment rate (of about 5%), then trade unions get stronger and wages rise
          set Wage  min list ((1 + cpi_1) * Wage) ((Wage-on-GDP_1 * GDP) / sum [Number-of-Employees] of Firms) ; two options: the previous wage increased by the consumer price index or the wage which keeps Wage-on-GDP constant
   ] [                                                                                          ; the second option for wage comes from finding the value of wage in (Wage-on-GDP_1 = Wage-on-GDP)
          set Wage  minimum-wage                                                                ; if the unemployment rate is higher than the frictional unemployment rate plus a margin, the wages cannot be lower than a legal minimum
   ]                                                                                            ; trade unions try to keep purchasing power of salaries or weight of salaries on GDP constant, but they loss power if unemployment increases
end 

to SubF-Update-Monetary-Variables
   set Monetary-Base                             Total-Central-Bank-Loans + PublicDebt - Account-of-State-at-Central-Bank - Central-Bank-Own-Capital    ; monetary base is "outside money", and that difference is "coins and bills" money
   set Currency                                  Monetary-Base - Total-Reserves                                                                         ; Currency is Currency, and this plus Total-Reserves is the Monetary-Base
   set Money-Supply                              Monetary-Base / RR                                                                                     ; Monetary-Base multiplied by the money multiplier (1/RR) is the Money-Supply
end 

to SubF-Entry-New-Firms                                                                                         ; if bakruptcy of firms occurs, a procedure for regenerating firms is activated
   let C-Firms-newcomers%                        0                                                              ; local variable, a probability following a Beta distribution
   ifelse GDP > GDP_1 [ set C-Firms-newcomers%  stats:beta 6 3 ] [ set C-Firms-newcomers%  stats:beta 3 6 ]     ; the probability of new firms depends on the GDP growth, and the Beta distribution is asymmetrical
   if Number-of-C-Firms > Current-Number-of-C-Firms [                                                           ; if the number of C-Firms is lower than the maximun, there is room for newcomers
      if random-float 1 < C-Firms-newcomers% [                                                                  ; with a probability that depends on the GDP growth, new C-Firms appear in the economy
         create-firms 1 [
                 move-to one-of patches with [not any? Firms-here]                                              ; if a C-Firm and K-Firm are at the same patch, move the new firm in the setup process
                 set shape                      "factory"                                                        ; just for fun, not necessary for the model, used only for display in HUD netlogo
                 set size                        2                                                               ; just for fun, not necessary for the model, used only for display in HUD netlogo
                 set color                       orange                                                          ; just for fun, not necessary for the model, used only for display in HUD netlogo
                 set C-Firm?                     true                                                            ; proper of the Firms, true means it is a consumption producer firm
                 set Owner?                      false                                                           ; this firm will have an owner, but at this moment does not have it
                 set Price                       random-float 2                                                  ; initial value for price
                 set Capital                     Initial-capital                                                 ; initial value for capital
                 set Stock                       Initial-production-C-firms                                      ; initial value for stock
                 set Production                  Initial-production-C-firms                                      ; initial value for production
                 set Revenue                     0                                                               ; initial value for revenue
                 set Sales                       0                                                               ; initial value for sales
                 set Need-Cash                   0                                                               ; initial value for cash needed before production, because lack of liquidity for starting it
                 set Cases-of-Bankruptcy         0                                                               ; the total number of bankruptcies by this firm
                 set Desired-Investment          0                                                               ; initial value for desire investment
                 set Investment                  0                                                               ; initial value for investment
                 set Number-of-Employees         0                                                               ; initial value for number of employees
                 set Need-of-Employees           0                                                               ; initial value for desire employees
                 set K-Firm-List                [ ]                                                              ; setup for the list which will be used to colect the K-Firms visited
                 set Vacancy                     0                                                               ; initial value for vacancy
                 set Bank-Account-Firm           Initial-liquidity-of-Firms                                      ; initial money deposited at the bank by the firms
                 set Investment-Memory           Initial-Capital                                                 ; initial value for Investment-Memory, parameter utilized to calculate the desire investment
                 set Util-Capacity               0                                                               ; initial value for util-capacity
                 create-banker-from              min-one-of banks [distance myself] [set hidden? true]           ; this create a link between the bank and the capitalist
                 set My-Nearest-Bank             min-one-of banks [distance myself]                              ; this bank is the same to which the C-Firms is now linked with a "banker" relationship
         ]                                                                                                      ; end new firm commands
      ]                                                                                                         ; end if random 100
   ]                                                                                                            ; end condition about room for new firms

   let Newcapitalist-C                           n-of 1 Workers with-max [ Bank-Account-Household ]              ; the new firm needs a new capitalist-owner
   ask Newcapitalist-C [                                                                                        ; we ask the worker with the highest savings to buy the Firm and become a capitalist
       ask one-of my-in-hireds [                                                                                ; the new capitalist is a worker yet and we take its labor contract and...
           ask other-end [                                                                                      ; ... at the other end of that contract is a firm
                set Vacancy                      Vacancy               + 1                                       ; the worker leaves, so the firm adjust the vacancies
                set Number-of-Employees          Number-of-Employees   - 1                                       ; the firm losses one worker
           ]
       die                                                                                                       ; the link, the labor relationship, dies
       ]
       set shape                                "person"                                                         ; this is unnecessary, because the worker also has a person shape
       set size                                  1.25                                                            ; the same goes for the size
       set color                                 white                                                           ; the color changes, because workers are yellow and capitalists are white
       set Worker?                               false                                                           ; he/she is now a capitalist
       set Current-Number-of-Workers             Current-Number-of-Workers - 1
       create-owner-from                         one-of Firms with [Owner? = false] [set hidden? true]           ; this creates a link between the firm and the capitalist
   ]


                                                     ; local variable with the total number of K-Firms alive in this period
   let K-Firms-newcomers%                        0                                                              ; local variable, a probability following a Beta distribution
   ifelse GDP > GDP_1 [ set K-Firms-newcomers%  stats:beta 6 3 ] [ set K-Firms-newcomers%  stats:beta 3 6 ]     ; the probability of new firms appearing depends on the GDP growth, and the Beta distribution is asymmetrical
       if Number-of-K-Firms > Current-Number-of-K-Firms [                                                       ; if the number of K-Firms is lower than the maximun, there is room for newcomers
          if random-float 1 < K-Firms-newcomers% [                                                              ; with a probability that depends on the GDP growth, new K-Firms appear in the economy
             create-firms 1 [
                  move-to one-of patches with [not any? Firms-here]                                             ; if a C-Firm and K-Firm are at the same patch, move the K-Firm in the setup process
                  set shape                     "factory"                                                       ; just for fun, not necessary for the model, used only for display in HUD netlogo
                  set size                       2                                                              ; just for fun, not necessary for the model, used only for display in HUD netlogo
                  set color                      green                                                          ; just for fun, not necessary for the model, used only for display in HUD netlogo
                  set C-Firm?                    false                                                          ; proper of the Firms, true means it is a consumption producer firm
                  set Owner?                     false                                                          ; this firm will have an owner, but at this moment does not have it
                  set Price                      random-float 2                                                 ; initial value for price
                  set Capital                    Initial-capital                                                ; initial value for capital
                  set Stock                      Initial-production-K-firms                                     ; initial value for stock
                  set Production                 Initial-production-K-firms                                     ; initial value for production
                  set Revenue                    0                                                              ; initial value for revenue
                  set Sales                      0                                                              ; initial value for sales
                  set Need-Cash                  0                                                              ; initial value for cash needed before production, because lack of liquidity for starting it
                  set Cases-of-Bankruptcy        0                                                              ; the total number of bankruptcies by this firm
                  set Desired-Investment         0                                                              ; initial value for desire investment
                  set Investment                 0                                                              ; initial value for investment
                  set Number-of-Employees        0                                                              ; initial value for number of employees
                  set Need-of-Employees          0                                                              ; initial value for desire employees
                  set Vacancy                    0                                                              ; initial value for vacancy
                  set Bank-Account-Firm          Initial-liquidity-of-Firms                                     ; initial money deposited at the bank by the firms
                  set Investment-Memory          Initial-Capital                                                ; initial value for Investment-Memory, parameter utilized to calculate the desire investment
                  set Util-Capacity              0                                                              ; initial value for util-capacity
                  create-banker-from             min-one-of banks [distance myself] [set hidden? true]          ; this create a link between the bank and the capitalist
                  set My-Nearest-Bank            min-one-of banks [distance myself]                             ; this bank is the same to which the C-Firms is now linked with a "banker" relationship
             ]                                                                                                  ; end sprout
          ]                                                                                                     ; end if random 100
   ]                                                                                                            ; end condition about room for new firms

   let Newcapitalist-K                           n-of 1 Workers with-max [ Bank-Account-Household ]             ; the new firm needs a new capitalist-owner
   ask Newcapitalist-K [                                                                                        ; we ask the worker with the highest savings to buy the Firm and become a capitalist
          ask one-of my-in-hireds [                                                                             ; the new capitalist is a worker yet and we take its labor contract
              ask other-end [                                                                                   ; at the other end of that contract is a firm
                  set Vacancy                    Vacancy               + 1                                      ; the worker leaves, so the firm adjust the vacancies
                  set Number-of-Employees        Number-of-Employees   - 1                                      ; the firm losses one worker
              ]
          die                                                                                                   ; the link, the labor relationship, dies
          ]
          set shape                            "person"                                                         ; this is unnecessary, because the worker also has a person shape
          set size                              1.25                                                            ; the same goes for the size
          set color                             white                                                           ; the color changes, because workers are yellow and capitalists are white
          set Worker?                           false                                                           ; he/she is now a capitalist
          set Current-Number-of-Workers         Current-Number-of-Workers - 1
          create-owner-from                     one-of Firms with [Owner? = false] [set hidden? true]           ; this create a link between the firm and the capitalist
  ]
end 

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