Cultural Values and Interbank Markets: An Agent-Based Stock-Flow Consistent Model

This repository contains the files to replicate the simulations and figures of "Cultural Values and Interbank Markets: An Agent-Based Stock-Flow Consistent Model" by Jessica Reale and Alessio Emanuele Biondo.

This study investigates how personal values influence financial decision-making in credit and interbank markets, affecting monetary policy effectiveness and financial stability. We hypothesize that heterogeneity in firms’, households’, and bank managers’ values shapes leverage preferences, risk-taking behavior, and interbank funding maturities, ultimately impacting macroeconomic dynamics and monetary policy outcomes.

This repository provides the code to explore how individual values interact with macro-financial policies and to assess the implications of cultural heterogeneity for financial stability and policy design.

The code implements an agent-based stock-flow consistent (AB-SFC) model, incorporating individual values into financial decision-making and analyzing their effects under different monetary policy scenarios. The interbank market structure is modeled through a matching mechanism where banks adjust lending and borrowing strategies based on their risk attitudes and funding preferences.

We simulate five scenarios based on heterogeneous cultural compositions of the population to assess financial stability under different value distributions. Additionally, we implement various monetary policy scenarios (Missing, Corridor, Corridor-unique, Expansionary) to evaluate policy effectiveness.