Is there open source software that simulates the effects of interest rates on an economy?


closed as unclear what you're asking by Martin Van der Linden, BKay, Kitsune Cavalry, dismalscience, jmbejara Apr 12 '16 at 15:44

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  • $\begingroup$ Hi. We'd like to answer your question. To help, try editing your answer to be more specific about which effects you would like to simulate. $\endgroup$ – jmbejara Apr 12 '16 at 15:46

Unfortunately, the answer is so broad I'm not sure how useful it may be.

First things first, you'd need a model for the economy. There are various around, in the last few years DSGE models like RBCM and NKM are popular. Pick the one that you think is the most appropriate.

After that, procure data from the past for calibrating the parameters of your model. The interest rate, of course, will be set by you.

Finally, you can use R, Matlab or Octave to simulate, given your model and parameters, a set of outcomes and provide a result for each interest rate.


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