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.
INET’s Young Scholar Initiative has created, under the suggestion of Neil Lancastle and Jay Pocklington, a virtual reading group of SFC models as well as of Godley and Lavoie’s Monetary Economics. If you’re interested, send me an email and I’ll invite you to the groups.
On the second day we introduce an investment function and explore model properties by shocking parameters.
Lab Files #2
Rename the .txt file to .prg to run it into Eviews
Finally we prepare a more complex accounting structure for the last lab exercise (excel file)
In the first day at the stock-flow lab at the Minsky Summer Seminar we show how to build a very simple model.
Files from Class #1
We note that although the accounting is consistent, the model structure is inconsistent since the stock of capital is growing while gdp converges to a steady state.
Warning for those who already downloaded the zip file! The program file I published yesterday was incomplete. I have now updated it, please download it again.
The Levy Institute organizes the 2012 Minsky Summer Seminar, which will include a rich series of lectures on financial balances, stock-flow consistent models, and a stock-flow lab. We will publish teaching materials from the lab later on.
The stock-flow lab at the Minsky Summer School was a success, according to my personal view…
Some students asked me to make materials availble on the web, since we did not use the readily available programs I had previously published, and I have therefore created a Walk-trough for what we did during the three days.
Students attending were great, keeping their attention to the last minute of the lab, even after a long working day.
I have been invited to give a course on sfc models in Pavia (Dec.14-16), along with a seminar on the current financial crisis (my slides, in Italian, are here).
Here are the slides I used to introduce the course. The course developed a simple sfc-model from the very beginning:
- Model matrices
- The simple model, simulated in Excel
- Simple calculations to obtain reasonable parameters for the equations
Eviews models are available here. They include
- model1: a simple sfc model with banks. Income distribution is fixed, investment growth is given. The hidden equation is deposits = loans
- model2: same as model 1, but with more reasonable values for capital depreciation, so that all stocks have reasonable values
- model3: first attempt to introduce a price for equities and portfolio choice between equities and deposits, but the accounting is wrong…
- model4: as model 3, but the accounting (for the demand for loans) has been fixed
- model5: as model 4, with a better specification for expected wealth
- model6: investment growth now depends on capacitiy utilization and the cost of borrowing
- model7: endogenous price level, accounting at constant and current prices
The next logical step would be to introduce a Phillips curve…
For who is interested in empirical stock-flow-consistent models, I prepared some Eviews programs with comments, which can be downloaded from my teaching platform here.
Register, and request enrollment to the course “Intoduction to macroeconometric models”