Project
An exploration of options on Gilt futures: An agent-based teaching model and data analysis project.
In 1694, the recently formed Bank of England gathered together 1268 individuals to subscribe to buy 1.2 million pounds of stock yielding 8%, designed to fund King William's war with France. The bonds became known as Gilts because the certificates had gilt edges to them. In conventional gilts, the Government will pay the holder a coupon, or cash payment, every six months until maturity.
Models
The stock-flow consistent agent-based (computational) Government money developed are interpretations of the government money systems described by Wynne Godley and Marc Lavoie (G&L) in their book Monetary Economics. The latest model is an open-ended development project.
Model Run
Model Government and Central Bank agents consume real-world UK expenditure and interest rate data respectively. Available economic time-series extends from the beginning of the financial year 1694 to the latest available. The model may run to the future, beyond the latest available data. A run to the future will require parameters defined by insights gained from the analysis of an evolving set of historical UK economic time-series and categorical data.
Supposition
Gilt yield dynamics are principally, but not only, the delayed effects of the velocity and acceleration of new currency instruments issued within the institutions of State.
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View the early models.