Journal on Policy and Complex Systems
Figure 3 . Changes in GDP over time in the cases without investment , with random investment financed from the bank , and with demand-based investment financed by the issuance of stock .
Figure 4 . Changes over time in GDP and the total amount of investment ( Panel a ) and average consumers ’ income and the average price of retailers ’ products ( Panel b ) in the case with demand-based investment financed only by internal funds .
variations in GDP and in consumers ’ income and price are very small and the period correspondence between GDP and the amount of investment is not clear compared to those in the case with bank financing .
Therefore , in an agent-based model in which producers ’ production and pricing activities and consumers ’ buying and working activities are already included , it is concluded that the essential conditions for reproducing business cycles would be the inclusion of bank financing and demand-based investment decision-making in the model structure .
On the other hand , Keynes ( 1936 ) proposed that the marginal efficiency of capital ( MEC ) is the primary determinant of the business cycle . This , in turn , implies that the internal rate of return is the essential factor underlying business cycles . Following this reasoning , an additional experiment was conducted in
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