Happy talk

I offer this as a happy change from the dismal science
David Wolsk

HAPPY TALK MAKES HAPPY FOLK

Shy people could become happier if they acted more outgoing, believes
William Fleeson, Wake Forest University associate professor of
psychology.

When study participants were asked to act outgoing, adventurous, or
assertive--such as asking a question in class or flirting with someone
attractive--they reported that they were having fun and felt happy,
says Fleeson. When asked to act more passive and shy, the same
participants reported feeling unhappy.

"As a society, we tend to think of happiness as something that comes
from outside us. It's kind of a radical idea that we have some control
of happiness, that personality is a factor in happiness, and that, to
some extent, we have control over our personalities," Fleeson says.
"The research demonstrates that extroversion can actually cause
happiness."

SOURCE: Wake Forest University,
http://www.wfu.edu/wfunews/2003/021903f.html

[Bruce Gregory (2003.0301.1429)]

David Wolsk wrote:

I offer this as a happy change from the dismal science.

This reminds of the research showing that controlling for facial
expressions leads people to experience the emotions associated with the
facial expression, even when they do not realize what expression they
are producing. Happiness, like stress, seems to be a side effect of
control.

···

--
Bruce Gregory lives with the poet and painter Gray Jacobik in the future
Canadian Province of New England.

www.joincanadanow.org

[From Rick Marken (2003.03.01.1740)]

I offer this as a happy change from the dismal science
David Wolsk

HAPPY TALK MAKES HAPPY FOLK

In my case, a happy model makes a happy me;-)

Which brings me back to the dismal science.

First, has anyone tried the spreadsheet version of Econ004? I'd like to
know if it works on other machines.

Second, Bill Powers recently sent a revised version of Econ004 that deals
correctly with the situation in which credit (going below zero reserves)
is not allowed. I've printed out the source but it would be nice if I
could get a version where the changed code is highlighted in some way. Is
there some way you could do that, Bill? Perhaps read the Pascal source
into WORD and italicize the changes?

Finally, I wonder if you (Bill P.) could explain your selection of
reference values for the variables that are controlled. For example, why
is the reference for plant inventory (Vp) 500, and the references for
cash (Rp) and capital (Ip) reserves 1000? Wouldn't the plant manager want
to keep Vp close to zero? I guess I'd also like to know how many
individuals you think each economic component represents. For example, is
plant output (Op, in N goods/day) and wage household consumption (Cw, in
N goods/day) per individual or per a collection of individuals in the
plant and household.

Best regards

Rick

···

--
Richard S. Marken
MindReadings.com
marken@mindreadings.com
310 474-0313

[From Bill Powers (2003.03.02.0759 MST)]

Rick Marken (2003.03.01.1740)--

>Second, Bill Powers recently sent a revised version of Econ004 that deals
>correctly with the situation in which credit (going below zero reserves)
>is not allowed. I've printed out the source but it would be nice if I
>could get a version where the changed code is highlighted in some way. Is
>there some way you could do that, Bill? Perhaps read the Pascal source
>into WORD and italicize the changes?

You found some repeated code, which I then fixed, and then I completely
rewrote the two procedures called kconsumerlevel1 and wconsumerlevel1. So I
can't really do as you ask, no longer having the original forms. Here are
the latest versions of the two procedures in their entirety -- they're not
very long:

···

======================================================================

{Wage consumer mechanics of working and buying}
procedure wconsumerlevel1;
begin
  with wC^, wH^, plant^ do
  begin
   Nw := outputRw; { Days worked/day, 0 <= Nw <= 1.0 }
   if Nw > 0.67 then Nw := 0.67; { Can't work more than 16 hr per day }
   Yw := Nw*W; { Household wage/day }
   Rw := Rw + Yw*dt; { Add income immediately}

   Xw := outputVw; { Spending/day on goods}
   if not CreditAllowed then
    if Xw*dt > Rw { Can't spend more than consumer reserve}
     then Xw := Rw/dt; { Spend all in reserve}
   if Xw*dt > Vp*P { Can't buy more than remaining stock}
    then Xw := Vp*P/dt; { Buy remaining stock}
   Rw := Rw - Xw*dt; { Subtract expenses from Reserve}
   Cw := Xw/P; { Goods/d depends on price & amt spent/d)}
   Vw := Vw+(Cw - Uw - Dw*Vw)*dt;{ Acquisitions - use - depreciation}
   if Vw < 0.0 then Vw := 0.0; { Cannot have less than 0 goods }

end;

{k consumer mechanics }
procedure kconsumerlevel1;
begin
  with kC^, kH^, plant^ do
  begin
   Yk := K; { Household capital Income per day }
   Rk := Rk + Yk*dt; { Add income immediately}

   Xk := outputVk; { Spending/day on goods}
   if not CreditAllowed then
    if Xk*dt > Rk { Can't spend more than consumer reserve}
     then Xk := Rk/dt; { Spend all in reserve}
   if Xk*dt > Vp*P { Can't buy more than remaining stock}
    then Xk := Vp*P/dt; { Buy remaining stock}
   Rk := Rk - Xk*dt; { Subtract expenses from Reserve}
   Ck := Xk/P; { Goods/d depends on price & amt spent/d)}
   Vk := Vk+(Ck - Uk - Dk*Vk)*dt;{ Acquisitions - use - depreciation}
   if Vk < 0.0 then Vk := 0.0; { Cannot have less than 0 goods }
  end;
end;

.

Finally, I wonder if you (Bill P.) could explain your selection of
reference values for the variables that are controlled.

Glad to oblige. I selected them at random.

For example, why
is the reference for plant inventory (Vp) 500, and the references for
cash (Rp) and capital (Ip) reserves 1000? Wouldn't the plant manager want
to keep Vp close to zero?

That's called the "just in time" strategy, but it's not a good idea if
there are variations in demand. Look up the "newsboy problem" to see how
game theory treats this problem. If the newsboy runs out of newspapers,
customers will start getting them elsewhere. In a national model, of
course, you might say that is unlikely, but if each plant making up the
composite producer wants to keep its customers, the average plant will keep
a nonzero inventory.

The actual level of inventory otherwise makes no difference once the
desired level has been built up, as the model works at present. Whatever
the steady-state level, the rate of production will equal the rate of
consumption.

When we introduce depreciation of inventory, the amount held will make a
difference -- the greater the inventory, the greater the expense of
maintaining it, and the greater the rate of loss or spoilage.

I guess I'd also like to know how many
individuals you think each economic component represents. For example, is
plant output (Op, in N goods/day) and wage household consumption (Cw, in
N goods/day) per individual or per a collection of individuals in the
plant and household.

I haven't made this explicit in the model -- there's no way to represent
changes in population, as we were discussing a couple of days back. You
could say that the numbers for flows and cumulative variables are in units
of millions; to put them on a per capita basis or per plant basis you'd
have to divide them by the population or number of plants. There's no point
in doing that until we have multiple entities, and even then, the most
useful breakdown is per entity, not per capita. Perhaps this would be a
good time to try to make the numbers more realistic -- you have access to
the Statistical Abstracts, don't you?

To get realistic numbers, of course, we might want to start with numbers
for individuals and multiply them by the number of individuals who are
members of the same class. As you're well aware, some aspects of this have
to take into account the composite nature of the class -- for example, the
savings rate for individual consumers is not the savings rate of the group
because individuals of all ages are saving and widthdrawing at the same
time. The aggregate picture can't be computed correctly by considering what
a typical family does and multiplying by 60 or 70 million.

Best,

Bill P.

[From Rick Marken (2003.03.02.1045)]

Bill Powers (2003.03.02.0759 MST)--

>Second, Bill Powers recently sent a revised version of Econ004 that deals
>correctly with the situation in which credit (going below zero reserves)
>is not allowed. I've printed out the source but it would be nice if I
>could get a version where the changed code is highlighted in some way. Is
>there some way you could do that, Bill? Perhaps read the Pascal source
>into WORD and italicize the changes?

You found some repeated code, which I then fixed, and then I completely
rewrote the two procedures called kconsumerlevel1 and wconsumerlevel1. So I
can't really do as you ask, no longer having the original forms. Here are
the latest versions of the two procedures in their entirety -- they're not
very long:

Thanks. One programming question. In the code:

if not CreditAllowed then
    if Xw*dt > Rw
     then Xw := Rw/dt;
   if Xw*dt > Vp*P
    then Xw := Vp*P/dt;
   Rw := Rw - Xw*dt;
   Cw := Xw/P;
   Vw := Vw+(Cw - Uw - Dw*Vw)*dt;
   if Vw < 0.0 then Vw := 0.0;

where is the end of the " if not CreditAllowed then" statement? I presume it ends
with:

  if Xw*dt > Vp*P
    then Xw := Vp*P/dt;

and that

  Rw := Rw - Xw*dt;
...

is done whether credit is allowed or not. Is that right?

The actual level of inventory otherwise makes no difference once the
desired level has been built up, as the model works at present. Whatever
the steady-state level, the rate of production will equal the rate of
consumption.

This also seems to be the way they keep track of inventory levels in the Statistical
Abstracts. They report only change in inventory, not absolute inventory levels. I
don't know if they even report inventory as percentage of GNP.

>I guess I'd also like to know how many
>individuals you think each economic component represents. For example, is
>plant output (Op, in N goods/day) and wage household consumption (Cw, in
>N goods/day) per individual or per a collection of individuals in the
>plant and household.

I haven't made this explicit in the model -- there's no way to represent
changes in population, as we were discussing a couple of days back. You
could say that the numbers for flows and cumulative variables are in units
of millions; to put them on a per capita basis or per plant basis you'd
have to divide them by the population or number of plants. There's no point
in doing that until we have multiple entities, and even then, the most
useful breakdown is per entity, not per capita. Perhaps this would be a
good time to try to make the numbers more realistic -- you have access to
the Statistical Abstracts, don't you?

Once I get the new version of the model running I'll give it a try.

Best regards

Rick

···

--
Richard S. Marken
MindReadings.com
marken@mindreadings.com
310 474-0313

[From Bill Powers (2003.03.02.1226 MST)]

> I presume "if not CreditAllowed then" ends with:

  if Xw*dt > Vp*P
    then Xw := Vp*P/dt;

and that

  Rw := Rw - Xw*dt;
...

is done whether credit is allowed or not. Is that right?

No, the second if--then statements are not included. Here's how it works:

   if not CreditAllowed then
     if Xw*dt > Rw {This if..then makes a complete pascal statement}
      then Xw := Rw/dt; {which ends the "if not creditallowed then" phrase}

If credit is NOT allowed, we check to see if we're spending more on goods
than we have in the cash reserve, and limit the amount to cash on hand.

   if Xw*dt > Vp*P {This starts a new if-then independent of the
previous one}
     then Xw := Vp*P/dt;

Then we check to see if the amount we're going to spend (Xw*dt) is greater
than the number of goods in inventory times their price (Vp*P). If it is,
we reduce the amount to be spent so it will just buy all that is in inventory.
Remember that Xw*dt will be subtracted from reserves, not just Xw -- that's
why the adjusted value has to be divided by dt. Does this work out right
for you?

The actual level of inventory otherwise makes no difference once the
> desired level has been built up, as the model works at present. Whatever
> the steady-state level, the rate of production will equal the rate of
> consumption.

This also seems to be the way they keep track of inventory levels in the
Statistical
Abstracts. They report only change in inventory, not absolute inventory
levels. I
don't know if they even report inventory as percentage of GNP.

That's odd, because at some point I should think you'd want to know what
the actual inventory is. Do they state it periodically, or never say what
it is at all?

  Once I get the new version of the model running I'll give it a try.

Good.

Best,

Bill P.

[From Rick Marken (2003.03.02.1255)]

Bill Powers (2003.03.02.1226 MST)--

> I presume "if not CreditAllowed then" ends with:

> if Xw*dt > Vp*P
> then Xw := Vp*P/dt;
>
>and that
>
> Rw := Rw - Xw*dt;
>...
>
>is done whether credit is allowed or not. Is that right?

No, the second if--then statements are not included.

I figured it out just as I pressing "send", of course! :wink:

>This also seems to be the way they keep track of inventory levels in the
>Statistical
>Abstracts. They report only change in inventory, not absolute inventory
>levels. I
>don't know if they even report inventory as percentage of GNP.

That's odd, because at some point I should think you'd want to know what
the actual inventory is. Do they state it periodically, or never say what
it is at all?

The only file I found showed inventory delta's for each year starting in, say,
1946. The inventory changes were in constant dollars. But I have not been able to
find any data on inventory as % of GNP, yet. I use the FRB files. Maybe they have
the data on inventory somewhere else. I'll check.

Best

Rick

···

--
Richard S. Marken
MindReadings.com
marken@mindreadings.com
310 474-0313