SFEcon Model 2 departs from Model 0 in a completely different direction from Model 1. The intent here was to install some simulacrum of global financial operations into M0.2.1.2.xlsm.

Model 0's input/output structure was innately three dimensional, including sectors I, commodities J, and economic blocs K. Its demonstrations emerged into a general optimality wherein no economic block had any net trade imbalances. While this is proper for any prospective solution to Mises' calculation problem, it falls short of portraying observable economic phenomena.

The phenomena to which we refer are that economies can come into domestic financial equilibrium to whatever extent a sustained trade imbalance might be offset by net returns on foreign investments. Honoring this observation requires a global superstructure to perform international financial settlements.

This superstructure was introduced into what we call our 'benchmark' model of the phenomena to be portrayed:

Benchmark.xlsm

This superstructure was introduced into what we call our 'benchmark' model of the phenomena to be portrayed:

The benchmark model was observed to absorb stimuli efficiently, exercising the functions of our global intermediary as it did. But it ultimately unwound all its global financial placements to the end of resolving all trade imbalances to zero.

Our desired result of sustained offsetting foreign trade imbalances with sustained foreign investments was achieved in our 'colonial' model:

Colonial.xlsm

The conceptual structures created for these demonstrations were easily extended to model a case in which one global interest rate and one global investment term were made to govern the finances of every economy:

Globalist.xlsm

The experiments performed with these models are described in a pair of YouTube videos:

Introduction

Comparisons