Towards a reconstruction of macroeconomics using a stock flow consistent (SFC) model
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Authors
Godley, Wynne
Publication Date
2004-05Series
CFAP Working Paper
16
Publisher
CFAP, Cambridge Judge Business School, University of Cambridge
Language
English
Type
Working Paper
Metadata
Show full item recordCitation
Godley, W. (2004). Towards a reconstruction of macroeconomics using a stock flow consistent (SFC) model. http://www.dspace.cam.ac.uk/handle/1810/225167
Abstract
This paper aims to rehabilitate “stock flow consistent” (SFC) macroeconomics as a radical alternative to the neo-classical approach which has dominated the subject during the last thirty years. Commercial banks are reckoned to play a central role in the macroeconomic process because they co-ordinate all the disparate aspirations, expectations and actions of the different sectors and this is one of many ways in which the model deployed here differs, not only from mainstream models, but also from “old fashioned” Keynesian models which have largely become extinct. A comprehensive system of stock and flow accounts, using four sectors and seven financial assets, will be deployed, followed by a narrative description of a theoretical model which can be numerically solved to yield sequences evolving in real time towards steady states. Details of the model’s equations are not disclosed but the paper clearly indicates an alternative methodology, while the simulations lend plausibility to some distinctive conclusions.
Keywords
macroeconomic theory, stock flow models, double entry accounting, simulation models, real time sequences
Identifiers
This record's URL: http://www.dspace.cam.ac.uk/handle/1810/225167