Development of a Macroeconomic Simulator with an Elaborated Firm Sector

We introduce the concept of capital goods into a macroeconomic agent-based model developed for analyzing the propagation of economic shock effects. This concept is based on a macroeconomic agent-based model encompassing the major economic agents and incorporates interfirm supplier-customer relationship improvements to bring firm behavior closer to reality. Based on a sensitivity analysis of the inventory ratio, if the intermediate goods inventory was estimated as larger than necessary, many of the products produced by firms would be sold to firms as intermediate input materials, while the quantity of products sold to households would decrease, reducing the household purchase volume. This would result in a negative cycle of reduced demand for the intermediate input material, further suppressing the production activity of firms.