Every result on this site comes from one published model. This page explains what it calculates, the assumptions it rests on, how uncertain it is, and how anyone can reproduce a run.
Model v0.1.0, released 16 October 2026. Parameter values are accepted for launch and open to revision.
Every figure is a simulated output for a fictional country. It is not a forecast, not a causal estimate for any real economy and not investment advice.
Read the full specification, with every equationBrowse the engine's source code
2,000,000 synthetic people in six regions, half women and half men in every region and age group. The engine works on 20,000 sample households, each standing for 40. No wage, job or leadership rule depends on gender, so any gender gap would have to come from a modelled mechanism; version 0.1 has none.
Output comes from private capital, public infrastructure, and the number and skills of workers. Productivity grows at a trend rate. Public spending on education and health raises skills over time.
Y = A · K^α · G^γ · (h · L)^(1 − α)
Unemployment responds to the minimum wage, unemployment benefits, labour taxes and collective bargaining, each through its own named parameter. Bargaining and the minimum wage also shift the share of output paid as wages. When jobs are lost, they fall first on the workers most at risk.
u = u₀ + η_mw·Δbite + η_ub·Δrr + η_w·Δτ_L + η_cb·ΔCB
Profits are shared between public enterprises, cooperatives and private owners. Changes in ownership phase in over five years and are paid for at book value with public bonds, so nobody's wealth is simply taken. Private investment responds to corporate tax, the profit share and, possibly, public deficits.
I = Y · [ι₀ · (tax term)^ε_τ · (profit term)^ε_π − ψ · max(0, Δdeficit)]
Revenue comes from income, capital, capital-gains, corporate and value-added taxes, plus the surplus of public enterprises. Spending covers health, education, infrastructure, pensions, unemployment benefits, a guaranteed minimum income and interest. Deficits add to debt or, if you choose, other spending is cut to respect a debt limit.
D(t+1) = D(t) + spending − revenue + compensation bonds
Households receive wages, dividends, interest, pensions and benefits, pay taxes, then consume and save; richer households save a larger share. Health costs that public spending doesn't cover fall on households, and some go without care.
disposable income = market income + transfers − taxes
Trade balances the national accounts, so Verdania behaves like a small open economy.
net exports = GDP − consumption − investment − public spending
The most important simplification: there is no demand block. Tax rises and spending cuts carry no short-run cost to output, and extra spending brings no short-run boost. Output responds only through capital, public infrastructure, skills and employment.
| Parameter | Verdania today | Range |
|---|---|---|
| Top income-tax ratetau_topVerdania today: 35%Range: 20% – 70% | 35% | 20% – 70% |
| Basic income-tax ratetau_bVerdania today: 22%Range: 5% – 40% | 22% | 5% – 40% |
| Corporate tax ratetau_cVerdania today: 25%Range: 5% – 45% | 25% | 5% – 45% |
| Capital-income tax ratetau_kVerdania today: 20%Range: 0% – 50% | 20% | 0% – 50% |
| Capital-gains tax ratetau_cgVerdania today: 15%Range: 0% – 50% | 15% | 0% – 50% |
| VAT ratetau_vVerdania today: 12%Range: 0% – 25% | 12% | 0% – 25% |
| Minimum wage (share of median wage)biteVerdania today: 45%Range: 30% – 70% | 45% | 30% – 70% |
| Collective-bargaining coveragecbVerdania today: 35%Range: 10% – 90% | 35% | 10% – 90% |
| Unemployment-benefit replacement raterrVerdania today: 40%Range: 0% – 80% | 40% | 0% – 80% |
| Guaranteed minimum income (share of baseline median)gmiVerdania today: 20%Range: 0% – 60% | 20% | 0% – 60% |
| Public health spendingmVerdania today: 4.5% of outputRange: 1% – 7% of output | 4.5% of output | 1% – 7% of output |
| Public education spendingeVerdania today: 4.2% of outputRange: 2% – 8% of output | 4.2% of output | 2% – 8% of output |
| Public infrastructure investmentigVerdania today: 3% of outputRange: 1% – 8% of output | 3% of output | 1% – 8% of output |
| Cooperative / worker-owned capital shares_coopVerdania today: 3%Range: 0% – 50% | 3% | 0% – 50% |
| Public ownership of capitals_pubVerdania today: 10%Range: 0% – 80% | 10% | 0% – 80% |
| Debt limit (used by the adjust-spending closure)debt_limitVerdania today: 90% of outputRange: 30% – 150% of output | 90% of output | 30% – 150% of output |
| Parameter | Central | Range | Evidence |
|---|---|---|---|
| Capital elasticity of outputalphaCentral: 0.35Range: 0.3 to 0.4Empirical range | 0.35 | 0.3 to 0.4 | Empirical range |
| Output elasticity of public capitalgammaBom & Ligthart (2014), Journal of Economic Surveys: meta-analysis mean about 0.08Central: 0.08Range: 0 to 0.15Empirical range | 0.08 | 0 to 0.15 | Empirical range |
| Private capital depreciationdeltaCentral: 0.06Range: 0.04 to 0.08Synthetic | 0.06 | 0.04 to 0.08 | Synthetic |
| Public capital depreciationdelta_gCentral: 0.04Range: 0.03 to 0.05Synthetic | 0.04 | 0.03 to 0.05 | Synthetic |
| Trend TFP growthg_aCentral: 0.01Range: 0.005 to 0.015Synthetic | 0.01 | 0.005 to 0.015 | Synthetic |
| Investment response to (1 - corporate tax)eps_tauCentral: 0.5Range: 0 to 1Contested | 0.5 | 0 to 1 | Contested |
| Investment response to profit shareeps_piCentral: 0.5Range: 0 to 1Contested | 0.5 | 0 to 1 | Contested |
| Crowding-out of private investment by deficitspsiCentral: 0.3Range: 0 to 1Contested | 0.3 | 0 to 1 | Contested |
| Unemployment response to minimum-wage biteeta_mwMinimum-wage employment effects disagree on sign at moderate bites (e.g. Cengiz et al. 2019)Central: 0.05Range: −0.05 to 0.2range crosses zeroContested | 0.05 | −0.05 to 0.2range crosses zero | Contested |
| Unemployment response to replacement rateeta_ubCentral: 0.03Range: 0 to 0.08Contested | 0.03 | 0 to 0.08 | Contested |
| Unemployment response to labour-tax rateeta_wCentral: 0.05Range: 0 to 0.15Contested | 0.05 | 0 to 0.15 | Contested |
| Unemployment response to bargaining coverageeta_cbOECD (2019) Negotiating Our Way Up: effects depend on coordinationCentral: 0Range: −0.02 to 0.04range crosses zeroContested | 0 | −0.02 to 0.04range crosses zero | Contested |
| Labour-share response to bargaining coveragetheta_cbCentral: 0.1Range: 0 to 0.25Theoretical | 0.1 | 0 to 0.25 | Theoretical |
| Labour-share response to minimum-wage bitetheta_mwCentral: 0.05Range: 0 to 0.15Theoretical | 0.05 | 0 to 0.15 | Theoretical |
| Wage compression from bargainingkappaCentral: 0.15Range: 0 to 0.3Theoretical | 0.15 | 0 to 0.3 | Theoretical |
| Taxable-income elasticity of top earnerse_tiSaez, Slemrod & Giertz (2012), Journal of Economic LiteratureCentral: 0.25Range: 0.1 to 0.5Empirical range | 0.25 | 0.1 to 0.5 | Empirical range |
| Human-capital growth per point of education spending (3-year lag)phi_eCentral: 0.1Range: 0 to 0.25Theoretical | 0.1 | 0 to 0.25 | Theoretical |
| Human-capital growth per point of health spending (1-year lag)phi_hCentral: 0.05Range: 0 to 0.15Theoretical | 0.05 | 0 to 0.15 | Theoretical |
| TFP-growth effect of collective ownership sharezeta_ownCentral: 0Range: −0.02 to 0.01range crosses zeroContested | 0 | −0.02 to 0.01range crosses zero | Contested |
| Retained share of after-tax operating surplusrho_retLow because operating surplus here includes self-employed mixed income and household-owned capitalCentral: 0.1Range: 0.05 to 0.2Synthetic | 0.1 | 0.05 to 0.2 | Synthetic |
| Base interest rate on public debtr0Central: 0.04Range: 0.03 to 0.06Synthetic | 0.04 | 0.03 to 0.06 | Synthetic |
| Debt risk premium per unit of debt above 60% of outputrho_dCentral: 0.05Range: 0.02 to 0.1Synthetic | 0.05 | 0.02 to 0.1 | Synthetic |
| Share of catastrophic-spending households forgoing carebeta_forgoCentral: 0.5Range: 0.3 to 0.8Synthetic | 0.5 | 0.3 to 0.8 | Synthetic |
Behaviour tests check limits only (for example, a 0% VAT raises no VAT). They never check the direction of a contested effect.
All people, places and figures in Verdania are synthetic, and every figure in the database is labelled synthetic or empirical. Empirical figures in use today: 0. Where a parameter's range draws on published research, the source is named in the table above.
Cited sources: Bom & Ligthart (2014), Journal of Economic Surveys; Cengiz, Dube, Lindner & Zipperer (2019), Quarterly Journal of Economics; OECD (2019), Negotiating Our Way Up; Saez, Slemrod & Giertz (2012), Journal of Economic Literature.
v0.1.0 · 16 October 2026current
First public model: supply-side macro block, household distribution, presets A-D. See docs/economic-model.md.
Every saved scenario keeps a complete record of its run:
