Simulation Output · village_simulation.py

Testing the Village Model: Three Hypotheses, Run

Results from executing Algorithm 1 (§5 of “Currency Junctions Between Small and Large Economies”) on three scenarios. Each chart plots the model's actual output — nothing here is illustrative.

H1 · Break of par

A thin reserve trades below par persistently, not occasionally

With only 12% of the reserve usable at the junction (ρ = 0.12) against a 25% import propensity, and volatile export earnings, the model predicts recurring stress. It ran stressed in all 156 periods.

Reserve, Rt

external-currency units (F)

Break-of-par discount, δt

share of import demand rationed (eq. 6)

H2 · Velocity vs. the reserve

Demurrage moves velocity a lot, the reserve very little

Two runs, identical trade parameters, differing only in demurrage (0% vs. 5% per period, with the Gesell spend-rate channel active). Demurrage is modeled as recycled town revenue — Wörgl's actual mechanism — not money destroyed, which is what keeps the reserve effect second-order.

Local velocity

local spend / τ supply, per period

Reserve, Rt

external-currency units (F)

H3 · Structural deficit

No internal knob fixes a deficit that's real

A fixed necessity-import bill (≈45 F/period, fuel and medicine) structurally exceeds what this village's exporters earn (≈34 F/period). Full reserve backing (ρ = 1) can't prevent depletion — only an external guarantor can, and it does so by drawing real, cumulative support.

Reserve, Rt

external-currency units (F)

Break-of-par discount, δt

share of import demand rationed (eq. 6)