Stock-flow consistent modelling: An alternative approach for dynamic models
| Authors | |
|---|---|
| Year of publication | 2014 |
| Type | Article in Proceedings |
| Conference | New Economic Challenges, 5th International PhD Students Conference |
| MU Faculty or unit | |
| Citation | |
| Field | Economy |
| Keywords | stock-flow consistent model; flow of funds; modern monetary theory |
| Description | This paper looks at the recent development in macroeconomic dynamic modelling. An analysis is focused on stock-flow consistent model as an alternative method to New Keynesian DSGE models. The methodology of stock-flow consistent models is based explicitly on the national accounts. This approach develops accounting view on financial assets and models behaviour of entities, typically sectors in economies. The behaviour is captured by changes in flows of funds and stocks. Due to this feature, SFC models are suitable for studying the effects of imbalances at the aggregate level, particularly possibilities and limitations of monetary and fiscal policy. The following objective of this article is to explain the structure of SFC models (the sectoral approach, transaction flow matrices) and evolutionary character of these models. Moreover are discussed issues dataset problems and agent-based model interconnection. The stock-flow consistent model opens an interesting opportunity for research, when seeking appropriate tools for successful application of modern monetary theory. |
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