Macroeconomic imbalances in an open economy stock-flow consistent model

The effects of macroeconomic imbalances have been widely discussed in macroeconomics. In a regime of fixed exchange rates the imbalances can arise from different growth rates in income and changes in the real exchange rate. In stock-flow consistent (SFC) models the standard way to handle a change in the real exchange rate works via export and import functions which are sensitive to nominal exchange rates and foreign levels of income.

Method to Simultaneously Determine Stock, Flow, and Parameter Values in Large Stock Flow Consistent Models

Stock flow consistent macroeconomic models suffer from the lack of a coherent estimation method due to the complicated nature of the modeling process. This paper provides a candidate estimation method that determines the values of each stock and flow simultaneously by analytically solving any stock flow model, and converting the estimation into a global minimization problem in p − k dimensions. We describe the method and apply it to a canonical model using real-world data. The method estimates the parameters and flows reliably.

Guaranteed Green Jobs: Sustainable Full Employment

In most economies, the potential of saving energy via insulation and more efficient uses of electricity is important. In order to reach the Kyoto Protocol objectives, it is urgent to develop policies that reduce the production of carbon dioxide in all sectors of the economy. This paper proposes an analysis of a green-jobs employer-of-last-resort (ELR) program based on a stock-flow consistent (SFC) model with three productive sectors (consumption, capital goods, and energy) and two household sectors (wage earners and capitalists).

Job Guarantee: a Structuralist Perspective

The structuralist and Stock Flow Consistent (SFC) approaches share some common grounds. Computable General Equilibriums (CGE) models, often used by structuralists, are based on Social Accounting Matrices, which are close SFC’s Transaction Flow Matrices. However, the analysis of structuralists model is more on the meso-level while SFC models are rather at macro-level. Our paper is a step, following Missaglia (2011), towards the creation of a structuralist/SFC model.

Innovation and Finance: An SFC Analysis of Great Surges of Development

Schumpeter, a century ago, argued that boom-and-bust cycles are intrinsically related to the functioning of a capitalistic economy. These cycles, inherent to the rise of innovation, are an unavoidable consequence of the way in which markets evolve and assimilate successive technological revolutions. Furthermore, Schumpeter's analysis stressed the fundamental role played by finance in fostering innovation, in defining bank credit as the "monetary complement" of innovation.