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First Microsimulation Model of a LEDDA Community Currency--Dollar Economy

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Abstract

Results are presented for a first-in-class microsimulation model of a community currency (local currency) system. The agent-based, stock-flow consistent model uses US Census income data as a starting point to project the evolution of community currency and dollar flows within a simplified county-level economy over a period of 28 years. Changes in the distribution of family income are tracked. The community currency system under investigation is the Token Exchange System (TES), a component of the larger Local Economic Direct Democracy Association (LEDDA) framework under development by the Principled Societies Project. The model captures key design features of a TES, and results suggest parameter ranges under which the simulated TES is capable of achieving stated aims. Median take-home family income more than doubles during the simulation period, income inequality is nearly eliminated, and the unemployment rate drops to a 1 percent structural level. The need for more sophisticated modeling of a TES, and avenues for future research, are discussed.

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Bibliographic Info

Paper provided by Principled Societies Project in its series Working Paper with number 0001.

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Length: 29 pages
Date of creation: May 2014
Date of revision: Aug 2014
Handle: RePEc:psp:wpaper:0001

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Web page: http://www.PrincipledSocietiesProject.org

Related research

Keywords: LEDDA; token; TES; sustainability; agent-based; stock-flow consistent; simulation; local currency; community currency; complementary currency; e-currency; economic democracy; economic direct democracy;

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  1. Seppecher, Pascal, 2012. "Flexibility Of Wages And Macroeconomic Instability In An Agent-Based Computational Model With Endogenous Money," Macroeconomic Dynamics, Cambridge University Press, vol. 16(S2), pages 284-297, September.
  2. Riccetti, Luca & Russo, Alberto & Gallegati, Mauro, 2012. "An Agent Based Decentralized Matching Macroeconomic Model," MPRA Paper 42211, University Library of Munich, Germany.
  3. Eugenio Caverzasi & Antoine Godin, 2013. "Stock-flow Consistent Modeling through the Ages," Economics Working Paper Archive wp_745, Levy Economics Institute.
  4. Maëlle Della Peruta & Dominique Torre, 2013. "Virtual social currencies for unemployed people: social networks and job market access," Working Papers halshs-00856480, HAL.
  5. Stodder, James, 2009. "Complementary credit networks and macroeconomic stability: Switzerland's Wirtschaftsring," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 79-95, October.
  6. McLeay, Michael & Radia, Amar & Thomas, Ryland, 2014. "Money creation in the modern economy," Bank of England Quarterly Bulletin, Bank of England, vol. 54(1), pages 14-27.
  7. Martinez, Stephen W. & Hand, Michael S. & Da Pra, Michelle & Pollack, Susan L. & Ralston, Katherine L. & Smith, Travis A. & Vogel, Stephen J. & Clark, Shellye & Lohr, Luanne & Low, Sarah A. & Newman, , 2010. "Local Food Systems: Concepts, Impacts, and Issues," Economic Research Report 96635, United States Department of Agriculture, Economic Research Service.
    • Martinez, Steve & Hand, Michael & Da Pra, Michelle & Pollack, Susan & Ralston, Katherine & Smith, Travis & Vogel, Stephen & Clarke, Shellye & Lohr, Luanne & Low, Sarah & Newman, Constance, 2010. "Local food systems: concepts, impacts, and issues," MPRA Paper 24313, University Library of Munich, Germany.
  8. John C. Boik, 2014. "Economic Direct Democracy: A Framework to End Poverty and Maximize Well-Being," Book, Principled Societies Project, number 0004.
  9. Miles Corak, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 79-102, Summer.
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