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view/download model file: fall-of-banks.nlogo
This model explains the effects of a “Ball-in” or “Bank crash” in a interconnected economy.
You can generate an economic systems, with random relationships between banks and companys. You can control the strong of this relationships and the size of economy, banks, and the bank in crise
Using the sliders, to control the strong of interconnexions between banks APALANCAMIENTO, you can control the size of bank who star the crises BANCO-QUIEBRA, and the sizes of other banks SIZE-OTHER-BANKS.
There are two sliders additionals, the slider RECOVEY show the recovery rate of banks that simulate the possibility that a bank in crises to improve their situations, the slider BANC-PANIC simulate the increasing possibility that a bank with relationship with a bank in crises to get in crises too.
The button BAL-IN simulate the effect of a bail in process (the bank is not able to pay the debts with the other banks and offer some solutions like give to them stock shares of himself), this is a risky operation and the others banks could absorb the loses or set in crises too.
The button BANK-CRASH simulate the crash of the bank who star the crises and the spread of this problem to other turtles (companys and other banks).
At the run of BANCK-CRASH, the other banks shrink in size and valor simulating the debt loses (the loans of the other banks to the bank who star the crisis can’t be payed), and the loses could star a crises in the banks too.
At the run of BAIL IN the other banks could star in crises, they could be payed by their loans to the bank who star the crises, but this pay is less valuable (stock shares are less valuable than the return of the loan), and this could star a crises too.
You can see not banking turtles (simulating no financieral companys, real state investments, …) that could star crises too in the two situations. The companys have loans wiht banks and need to renew the loans and the access to credit for improve their working process, when banks are in crises the no financieral turtles have problems to get new loans, and could star a crises too depending of the relative size of the banks who was in crises.
A mid term crises bring the company or the bank to bank-rupt and dissapear of economy (it will die).
You can see that the relative size of bank who star the crises, the financial leverage (APALANCAMIENTO) and the recovery rate of banks in crises could give more different outputs. But, when you try the model several times, in the best conditions (low financial leverage, the bank who star the crises are smaller than other banks, and big recovery rate) the crises could arrive to all the economy destroying all.
If you mention this model in a publication, we ask that you include these citations for the model itself and for the NetLogo software:
Copyright 2012 Jose Rodriguez
This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-sa/3.0/ or send a letter to Creative Commons, 559 Nathan Abbott Way, Stanford, California 94305, USA.
Commercial licenses are also available.
turtles-own
[
infected? ;; if true, the turtle is infectious
dependence-of-1
dependence-of-2
dependence-of-3
dependence-of-4
dependence-of-5
dependence-of-6
dependence-of-7
dependence-total
dependence-of-0
dead
dissapear?
economic-valor
recovering?
intrinsic
crises
employment
home-savings
origin-employment
origin-savings
]
breed [bancs banc]
breed [empresas empresa]
globals
[
size0
size1
size2
size3
size4
total-economy
total-size
time
total-intrinsic
environment
total-employment
total-savings
original-employment
original-savings
]
to setup
clear-all
change-environment
setup-nodes
setup-spatially-clustered-network
reset-ticks
end
to change-environment
;; loads an image as a background from the current directory the model was launched from
set environment "bolsa.jpg"
import-drawing environment
end
to setup-nodes
set-default-shape turtles "circle"
create-bancs 5
[
; for visual reasons, we don't put any nodes *too* close to the edges
setxy (random-xcor * 0.95) (random-ycor * 0.95)
set size0 banco-quiebra
set size1 size-other-banks
set size2 size-other-banks
set size3 size-other-banks
set size4 size-other-banks
set total-size size0 + size1 + size2 + size3 + size4
ask turtle 1 [set color green set size size1 set shape "coin heads" set economic-valor size1 set intrinsic economic-valor set employment economic-valor set origin-employment economic-valor]
ask turtle 2 [set color green set size size2 set shape "coin heads" set economic-valor size2 set intrinsic economic-valor set employment economic-valor set origin-employment economic-valor]
ask turtle 3 [set color green set size size3 set shape "coin heads" set economic-valor size3 set intrinsic economic-valor set employment economic-valor set origin-employment economic-valor]
ask turtle 0 [set color green set size size0 set shape "coin heads" set economic-valor size0 set intrinsic economic-valor set employment economic-valor set origin-employment economic-valor]
ask turtle 4 [set color green set size size4 set shape "coin heads" set economic-valor size4 set intrinsic economic-valor set employment economic-valor set origin-employment economic-valor]
]
ask turtle 1 [set dependence-of-0 random-float 1 * apalancamiento * (size0 / size1) set dependence-of-2 random-float 1 * apalancamiento * size2 / size1 set dependence-of-3 random-float 1 * apalancamiento * size3 / size1 set dependence-of-4 random-float 1 * apalancamiento * size4 / size1]
ask turtle 2 [set dependence-of-0 random-float 1 * apalancamiento * (size0 / size2) set dependence-of-1 random-float 1 * apalancamiento * size1 / size2 set dependence-of-3 random-float 1 * apalancamiento * size3 / size2 set dependence-of-4 random-float 1 * apalancamiento * size4 / size2]
ask turtle 3 [set dependence-of-0 random-float 1 * apalancamiento * (size0 / size3) set dependence-of-2 random-float 1 * apalancamiento * size2 / size3 set dependence-of-1 random-float 1 * apalancamiento * size1 / size3 set dependence-of-4 random-float 1 * apalancamiento * size4 / size3]
ask turtle 4 [set dependence-of-0 random-float 1 * apalancamiento * (size0 / size4) set dependence-of-2 random-float 1 * apalancamiento * size2 / size4 set dependence-of-1 random-float 1 * apalancamiento * size1 / size4 set dependence-of-3 random-float 1 * apalancamiento * size3 / size4]
ask turtle 0 [set dependence-of-4 random-float 1 * apalancamiento * (size4 / size0) set dependence-of-2 random-float 1 * apalancamiento * size2 / size0 set dependence-of-1 random-float 1 * apalancamiento * size1 / size0 set dependence-of-4 random-float 1 * apalancamiento * size4 / size0]
create-empresas size-other-banks * 1.5 [ setxy (random-xcor * 0.95) (random-ycor * 0.95) set dependence-of-0 random-float 1 * (size0 / total-size) set dependence-of-1 random-float 1 * (size1 / total-size) set dependence-of-2 random-float 1 * (size2 / total-size) set dependence-of-3 random-float 1 * (size3 / total-size) set dependence-of-4 random-float 1 * (size4 / total-size) set economic-valor 1 set color green set shape "factory" set size 2 set intrinsic economic-valor set employment economic-valor set origin-employment economic-valor]
create-empresas size-other-banks * 1.5 [ setxy (random-xcor * 0.95) (random-ycor * 0.95) set dependence-of-0 random-float 1 * (size0 / total-size) set dependence-of-1 random-float 1 * (size1 / total-size) set dependence-of-2 random-float 1 * (size2 / total-size) set dependence-of-3 random-float 1 * (size3 / total-size) set dependence-of-4 random-float 1 * (size4 / total-size) set economic-valor 1 set color green set shape "logs" set size 2 set intrinsic economic-valor set employment economic-valor set origin-employment economic-valor]
create-empresas size-other-banks * 1.5 [ setxy (random-xcor * 0.95) (random-ycor * 0.95) set dependence-of-0 random-float 1 * (size0 / total-size) set dependence-of-1 random-float 1 * (size1 / total-size) set dependence-of-2 random-float 1 * (size2 / total-size) set dependence-of-3 random-float 1 * (size3 / total-size) set dependence-of-4 random-float 1 * (size4 / total-size) set economic-valor 1 set color green set shape "food" set size 2 set intrinsic economic-valor set employment economic-valor set origin-employment economic-valor]
create-empresas size-other-banks * 1.5 [ setxy (random-xcor * 0.95) (random-ycor * 0.95) set dependence-of-0 random-float 1 * (size0 / total-size) set dependence-of-1 random-float 1 * (size1 / total-size) set dependence-of-2 random-float 1 * (size2 / total-size) set dependence-of-3 random-float 1 * (size3 / total-size) set dependence-of-4 random-float 1 * (size4 / total-size) set economic-valor 1 set color green set shape "building institution" set size 2 set intrinsic economic-valor set employment economic-valor set origin-employment economic-valor]
create-empresas size-other-banks * 3 [ setxy (random-xcor * 0.95) (random-ycor * 0.95) set dependence-of-0 random-float 1 * (size0 / total-size) set dependence-of-1 random-float 1 * (size1 / total-size) set dependence-of-2 random-float 1 * (size2 / total-size) set dependence-of-3 random-float 1 * (size3 / total-size) set dependence-of-4 random-float 1 * (size4 / total-size) set economic-valor 1 set color green set shape "house" set size 2 set intrinsic economic-valor set home-savings economic-valor set origin-savings economic-valor]
ask turtles [set dependence-total dependence-of-0 + dependence-of-1 + dependence-of-2 + dependence-of-3 + dependence-of-4]
set total-economy sum [economic-valor] of turtles
set total-intrinsic sum [intrinsic] of turtles
set total-employment sum [employment] of turtles
set total-savings sum [home-savings] of turtles
set original-employment sum [employment] of turtles
set original-savings sum [home-savings] of turtles
ask turtle 0 [set infected? true set color red set crises 1 set label "Crises focus" set economic-valor 0]
set time 1
;; Layout turtles:
layout-circle (sort bancs) 20
repeat 15 [do-layout]
repeat 55 [do-layout display]
end
to do-layout
repeat 1 [layout-spring empresas links 0.2 4 0.9]
repeat 1 [layout-spring bancs links 0.2 4 0.9]
end
to setup-spatially-clustered-network
end
to bank-bail-in
if all? turtles [crises = 0]
[ stop ]
spread-virus
do-virus-checks
tick
end
to become-infected ;; turtle procedure
end
to spread-virus
ask bancs [if dead > 10 [hide-turtle set dissapear? true set color black set crises 0 set employment 0]]
ask empresas [if dead > 10 [die]]
ask turtles [if color = red [set dead dead + 1]]
ask bancs [if random-float 100 < recovey and infected? = true and dead < 10 [set color yellow set infected? false set economic-valor intrinsic / 2 set recovering? true] ]
ask bancs [if random-float 100 < recovey and recovering? = true and dead < 10 [set color green set recovering? false set economic-valor intrinsic set recovering? true set crises 0] ]
if ([color] of turtle 0 = red and [dead] of turtle 0 < 3) [ask bancs [if random-float 1 < dependence-of-0 * (1 + banc-panic / 100) [set infected? true set color red set economic-valor 0 set crises 1]] ask empresas [if random-float 1 < dependence-of-0 [set infected? true set color red set economic-valor 0 set crises 1]]]
if ([color] of turtle 0 = yellow ) [ask empresas [if random-float 1 < dependence-of-0 [set color yellow set infected? false set economic-valor intrinsic / 2 ]]]
if ([color] of turtle 0 = green) [ask empresas [if random-float 1 < dependence-of-0 [set color green set infected? false set economic-valor intrinsic set crises 0]]]
if ([color] of turtle 1 = red and [dead] of turtle 1 < 3) [ask bancs [if random-float 1 < dependence-of-1 * (1 + banc-panic / 100) [set infected? true set color red set economic-valor 0 set crises 1]] ask empresas [if random-float 1 < dependence-of-1 [set infected? true set color red set economic-valor 0 set crises 1]]]
if ([color] of turtle 1 = yellow) [ask empresas [if random-float 1 < dependence-of-1 [set color yellow] set infected? false set economic-valor intrinsic / 2 ]]
if ([color] of turtle 1 = green) [ask empresas [if random-float 1 < dependence-of-1 [set color green set infected? false set economic-valor intrinsic set crises 0]]]
if ([color] of turtle 2 = red and [dead] of turtle 2 < 3) [ask bancs [if random-float 2 < dependence-of-2 * (1 + banc-panic / 100) [set infected? true set color red set economic-valor 0 set crises 1]] ask empresas [if random-float 1 < dependence-of-2 [set infected? true set color red set economic-valor 0 set crises 1]]]
if ([color] of turtle 2 = yellow) [ask empresas [if random-float 1 < dependence-of-2 [set color yellow set infected? false] set economic-valor intrinsic / 2 ]]
if ([color] of turtle 2 = green) [ask empresas [if random-float 1 < dependence-of-2 [set color green set infected? false set economic-valor intrinsic set crises 0]]]
if ([color] of turtle 3 = red and [dead] of turtle 2 < 3) [ask bancs [if random-float 3 < dependence-of-3 * (1 + banc-panic / 100) [set infected? true set color red set economic-valor 0 set crises 1]] ask empresas [if random-float 1 < dependence-of-3 [set infected? true set color red set economic-valor 0 set crises 1]]]
if ([color] of turtle 3 = yellow) [ask empresas [if random-float 1 < dependence-of-3 [set color yellow set infected? false set economic-valor intrinsic / 2 ]]]
if ([color] of turtle 3 = green) [ask empresas [if random-float 1 < dependence-of-3 [set color green set infected? false set economic-valor intrinsic set crises 0]]]
if ([color] of turtle 4 = red and [dead] of turtle 3 < 3) [ask bancs [if random-float 4 < dependence-of-4 * (1 + banc-panic / 100) [set infected? true set color red set economic-valor 0 set crises 1]] ask empresas [if random-float 1 < dependence-of-4 [set infected? true set color red set economic-valor 0 set crises 1]]]
if ([color] of turtle 4 = yellow) [ask empresas [if random-float 1 < dependence-of-4 [set color yellow set infected? false set economic-valor intrinsic / 2 ]]]
if ([color] of turtle 4 = green) [ask empresas [if random-float 1 < dependence-of-4 [set color green set infected? false set economic-valor intrinsic set crises 0]]]
set total-economy sum [economic-valor] of turtles
set total-employment sum [employment] of turtles
set total-savings sum [home-savings] of turtles
end
to bank-crash
if all? turtles [crises = 0]
[ stop ]
bank-crash-1
if time > 3 [
ask bancs [if dead > 5 [hide-turtle set dissapear? true set color black set crises 0 set infected? false set employment 0]]
ask empresas [if dead > 10 [die]]
ask turtles [if color = red [set dead dead + 1]]
ask bancs [if random-float 100 < recovey and infected? = true [set color yellow set infected? false set economic-valor intrinsic / 2 set recovering? true] ]
ask bancs [if random-float 100 < recovey and recovering? = true [set color green set recovering? false set economic-valor intrinsic set recovering? true set crises 0 set employment origin-employment] ]
if ([color] of turtle 1 = red) [ask bancs [if random-float 1 < dependence-of-1 * (1 + banc-panic / 100) [set infected? true set color red set economic-valor 0 set crises 1]] ask empresas [if random-float 1 < dependence-of-1 [set infected? true set color red set economic-valor 0 set crises 1]]]
if ([color] of turtle 1 = yellow) [ask empresas [if random-float 1 < dependence-of-1 [set color yellow] set infected? false set economic-valor intrinsic / 2 set employment origin-employment / 1.5]]
if ([color] of turtle 1 = green) [ask empresas [if random-float 1 < dependence-of-1 [set color green set infected? false set economic-valor intrinsic set crises 0 set employment origin-employment / 1.5]]]
if ([color] of turtle 2 = red) [ask bancs [if random-float 2 < dependence-of-2 * (1 + banc-panic / 100) [set infected? true set color red set economic-valor 0 set crises 1]] ask empresas [if random-float 1 < dependence-of-2 [set infected? true set color red set economic-valor 0 set crises 1]]]
if ([color] of turtle 2 = yellow) [ask empresas [if random-float 1 < dependence-of-2 [set color yellow set infected? false] set economic-valor intrinsic / 2 set employment origin-employment / 1.5]]
if ([color] of turtle 2 = green) [ask empresas [if random-float 1 < dependence-of-2 [set color green set infected? false set economic-valor intrinsic set crises 0 set employment origin-employment / 1.5]]]
if ([color] of turtle 3 = red) [ask bancs [if random-float 3 < dependence-of-3 * (1 + banc-panic / 100) [set infected? true set color red set economic-valor 0 set crises 1]] ask empresas [if random-float 1 < dependence-of-3 [set infected? true set color red set economic-valor 0 set crises 1]]]
if ([color] of turtle 3 = yellow) [ask empresas [if random-float 1 < dependence-of-3 [set color yellow set infected? false set economic-valor intrinsic / 2 set employment origin-employment / 1.5]]]
if ([color] of turtle 3 = green) [ask empresas [if random-float 1 < dependence-of-3 [set color green set infected? false set economic-valor intrinsic set crises 0 set employment origin-employment / 1.5]]]
if ([color] of turtle 4 = red) [ask bancs [if random-float 4 < dependence-of-4 * (1 + banc-panic / 100) [set infected? true set color red set economic-valor 0 set crises 1]] ask empresas [if random-float 1 < dependence-of-4 [set infected? true set color red set economic-valor 0 set crises 1]]]
if ([color] of turtle 4 = yellow) [ask empresas [if random-float 1 < dependence-of-4 [set color yellow set infected? false set economic-valor intrinsic / 2 set employment origin-employment / 1.5]]]
if ([color] of turtle 4 = green) [ask empresas [if random-float 1 < dependence-of-4 [set color green set infected? false set economic-valor intrinsic set crises 0 set employment origin-employment]]]
set total-economy sum [economic-valor] of turtles
set total-employment sum [employment] of turtles
set total-savings sum [home-savings] of turtles
]
set time time + 1
tick
end
to bank-crash-1
if time = 1 [
ask turtle 0 [die]
ask bancs [set size size - dependence-of-0 * size0 set intrinsic intrinsic - dependence-of-0 * size0 set economic-valor economic-valor - dependence-of-0 * size0]
]
if time < 4
[
ask empresas [if random-float 1 < dependence-of-0 * (1 + banc-panic / 100) [die]]
ask turtle 1 [if random-float 1 < dependence-of-0 * (1 + banc-panic / 100) [set infected? true set color red set crises 1 set economic-valor 0 ask empresas [if random-float 1 < dependence-of-1 * (1 + banc-panic / 100) [die]]] if random-float 0.5 < dependence-of-0 * (1 + banc-panic / 100) [set color yellow set recovering? true set economic-valor intrinsic / 2 set crises 1] ]
ask turtle 2 [if random-float 1 < dependence-of-0 * (1 + banc-panic / 100) [set infected? true set color red set crises 1 set economic-valor 0 ask empresas [if random-float 1 < dependence-of-2 * (1 + banc-panic / 100) [die]]] if random-float 0.5 < dependence-of-0 * (1 + banc-panic / 100) [set color yellow set recovering? true set economic-valor intrinsic / 2 set crises 1] ]
ask turtle 3 [if random-float 1 < dependence-of-0 * (1 + banc-panic / 100) [set infected? true set color red set crises 1 set economic-valor 0 ask empresas [if random-float 1 < dependence-of-3 * (1 + banc-panic / 100) [die]]] if random-float 0.5 < dependence-of-0 * (1 + banc-panic / 100) [set color yellow set recovering? true set economic-valor intrinsic / 2 set crises 1] ]
ask turtle 4 [if random-float 1 < dependence-of-0 * (1 + banc-panic / 100) [set infected? true set color red set crises 1 set economic-valor 0 ask empresas [if random-float 1 < dependence-of-4 * (1 + banc-panic / 100) [die]]] if random-float 0.5 < dependence-of-0 * (1 + banc-panic / 100) [set color yellow set recovering? true set economic-valor intrinsic / 2 set crises 1] ]
set total-economy sum [economic-valor] of turtles
]
end
to do-test-0
ask turtles [if random-float 1 < dependence-of-0 * (1 + banc-panic / 100) [set infected? true set color red]]
end
to do-virus-checks
end
; Copyright 2012 Jose Rodriguez.
; See Info tab for full copyright and license.