Patrizio Lainà, from Helsinki, has started a Facebook group dedicated to discussing stock-flow consistent modelling. If interested, visit this page: https://www.facebook.com/groups/864213403637227/
A new working paper by Ítalo Pedrosa and Antonio Carlos Macedo e Silva, “A Minskyan-Fisherian SFC model for analyzing the linkages of private financial behavior and public debt” is available here
Abstract: This paper builds a stock-flow consistent (SFC) model to analyze how private financial behavior impacts fiscal variables, by exploring the linkages between the financial and productive sides of the economy with prices given by a Phillips curve. We study three different fiscal expenditure regimes: 1. Automatic stabilizer: government expenditures follow an exogenous long run trend; 2. Countercyclical fiscal expenditure; 3. Fiscal austerity: government reduces expenditures when it faces an increase in its debt to capital ratio. The model has three major implications, ratifying Keynesian intuitions. First, an increase in public debt is an unintended consequence of contractionary financial conditions. Second, in most cases countercyclical fiscal expenditures improve both the economic activity and the trajectory of public debt to GDP. Third, austerity policies postpone and magnify the after-shock adjustment, and may not be compatible with fiscal soundness.
I have received from Hamid Raza, working with Stephen Kinsella in Limerick, a package containing models from Godley & Lavoie Monetary economics, chapters 3 to 9.
They have been published in the model section of the website.
(I have not checked the code yet…)
I deeply thank Hamid, since R is a free software, and the availability of R code will be of great help to anyone who is not willing to purchase a software licence.
Applied Macro-Modelling: Fully Scalable Models – 2nd Edition
Winter School On Agent Based And Stock Flow Consistent Modelling
Limerick, January 26th – February 3th
Why You Should Join Our Winter School
If you are a highly motivated student of economics at master or Ph.D. level, or you are working with a research center or a public institution and want to spend one week studying, researching, discussing, and exchanging experiences in the nice atmosphere of an Irish University campus nurtured by international experts and fellow students from all around the world, our winter school offers you:
One-week winter university with international students and lecturers.
An opportunity to produce and confront research outputs such as thesis chapter or working paper with established scholars.
Lab modules, to learn how to implement and apply the theoretical models using software like R, Java.
Asjad Naqvi has developed the Mathematica code for most Godley-Lavoie models, and put them up so that they can be used interactively.
Here is a letter from Kenn Tamara, who developed the models in Godley-Lavoie using Python:
I was reading “Monetary Economics” by Godley and Lavoie and came across the sfc-models.net website. I have taken your eViews models and reimplemented them using Python (running the experiments and generating the figures).
Everything is open-source and is written with a package that I developed to help specify and solve the models. The models are implemented as iPython notebooks for easier viewing and can be found at:
Information on the pysolve package used to specify and solve the models can be found at:
(A little warning, the code for pysolve is still under development and there isn’t that much documentation yet)
I hope that the python implementation is useful and would like to contribute it to sfc-models.net.
I recently discovered that Kevin W. Capehart has written a piece of code in Mathematica from one of my Eviews files for the Godley – Lavoie Monetary economics book, and turned it into a CDF, to illustrate the paradox of thrift
To run the simulation you need to install the free Wolfram reader, and activate it.
This little tool is potentially very useful in exploring stock-flow models, which are tipically non linear, and therefore difficult to solve analitically. Creating a nice interface which allows the user to check model responses to different values of parameters and exogenous variables could help find the range of parameter values for which the model is producing stable (or unstable etc) solutions.
Ayoze Alfageme kindly offered to update our references database on publications adopting the stock-flow-consistent approach.
The following is a preliminary list of recent papers, that will soon be included in our database:
- Le Heron, E. (2013). Macro-foundations of micro and micro-foundations of macro: Income distribution, increasing risks and household behaviours. Working paper (Limerick SFC Workshops).
- Ehnts, D. H. (2013). Macroeconomic imbalances in an open economy stock-flow consistent model., working paper
- Bernardo, G., & Campiglio, E. (2013). A simple model of income, aggregate demand and the process of credit creation by private banks. Empirica, 1-25.
- Mazier, J., & Valdecantos, S. (2013). A Multi-Speed Europe: is it viable? A Stock-Flow Consistent Approach. Working paper
- Belabed, C. A., Theobald, T., & van Treeck, T. (2013). Income Distribution and Current Account Imbalances. Hans-Böckler-Stiftung. Working paper
- Dafermos, Y., & Papatheodorou, C. Modelling the effects of functional on personal income distribution: A flow-of-funds approach. Working paper
- Kinsella, S. (2013). Are there policy alternatives to Ireland’s austerity?, Working paper.
- Carvalho, L., & Di Guilmi, C. (2013). Macroeconomic instability and microeconomic financial fragility: a stock-flow consistent approach with heterogeneous agents, Working paper.
- de Jager, P. (2014), Fair value accounting, fragile bank balance sheets and crisis: A model, Accounting, Organizations and Society, Volume 39, Issue 2
- Caiani, A., Godin, A. and Lucarelli, S. (2014), A Stock Flow Consistent Analysis of a Schumpeterian Innovation Economy. Metroeconomica, 65: 397–429. doi: 10.1111/meca.12045
- Costa Lima, B. and Grasselli, M.R. (2014). Destabilizing a stable crisis: Employment persistence and government intervention in macroeconomics, Structural Change and Economic Dynamics, Volume 30, September 2014, Pages 30–51
- van Suntum, U. (2014). Böhm-Bawerk meets Keynes: What does determine the interest rate, and can the latter become negative? (No. 65). CAWM Discussion Paper, Centrum für Angewandte Wirtschaftsforschung Münster.
- Caverzasi, E., & Godin, A. (2014). Financialization and the sub-prime crisis: a Stock-Flow Consistent model, Working paper.
- van Suntum, U. (2013). Long Term Effects of Fiscal and Monetary Policy in a Stock-Flow-Consistent Macro-Framework, journal Credit and Capital Markets, Volume 46, issue 2, p 181-212
- Nikolaidi, M. (2014), Margins of Safety and Instability in a Macrodynamic Model with Minskyan Insights (May 2014). Structural Change and Economic Dynamics, Vol. 31, 2014.
- Boik, J.C. (2014). First Microsimulation Model of a LEDDA Community Currency–Dollar Economy, Working paper
- Nikolaidi, M. (2014). Securitisation, wage stagnation and financial fragility: A stock-flow consistent perspective, Working paper
- Caverzasi, E., & Godin, A. (2014). Post-Keynesian stock-flow-consistent modelling: a survey. Cambridge Journal of Economics.
This year, as in the previous years, Marc Lavoie and Gennaro Zezza will be presenting the Stock-Flow-Consistent modeling approach at the Minsky Summer Seminar at the Levy Institute.
Winter School on Agent Based and Stock Flow Consistent modelling.
Limerick, January 30th – February 7th
If you are a highly motivated student of economics at masters or Ph.D. level, or you are working with a research center or a public institution and want to spend one week studying, researching, discussing, and exchanging experiences in the nice atmosphere of an Irish University campus nurtured by international experts and fellow students from all around the world, our winter school offers you 7 working days of lectures, seminars, and labs on Stock-Flow Consistent and Agent Based approaches. For more information, see http://s120.ul.ie/drupal/winterSchool and Applied Macro-modelling – Call For Application.