Results are presented for a first-in-class microsimulation model of a local-national currency system.
The agent-based, stock-flow consistent model uses US Census income data as a starting point to project the evolution of local currency (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 and mean take-home family income more than double during the simulation period, income inequality is nearly eliminated, and the un- employment rate drops to a 1 percent structural level. The need for more sophisticated modeling of a TES, and avenues of future research, are discussed.
John Boik
Boik, J. (2014) ‘First Micro-Simulation Model of a LEDDA Community Currency-Dollar Economy’ International Journal of Community Currency Research 18 (A) 11-29 <www.ijccr.net> ISSN 1325-9547
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A number of New Zealand communities have had a local currency operating in parallel (we have one here in New Plymouth) to the New Zealand dollar since the 1990s. Talents can be traded for NZ dollars at a 1 to 1 ratio. We’ve had a ruling from Inland Revenue that local currency income must be reported if it’s earned as part of an established business activity. Local currency income earned to supplement retirement or disability income isn’t taxed.
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That is a wonderful idea.
The number of complementary currencies will hopefully increase as local communities seek to implement their local solutions.
Have you heard about any grassroot movements to boycott corporations and close bank accounts as for this holiday season?
Starve the beast, and halt the machine; I have a feeling…
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