Revisiting 'New Cambridge': The Three Financial Balances in a General Stock-Flow Consistent Applied Modeling Strategy

Abstract

This paper argues that modified versions of the so-called “New Cambridge” approach to macroeconomic modeling are both quite useful for modeling real capitalist economies in historical time and perfectly compatible with the “vision” underlying modern Post- Keynesian stock-flow consistent macroeconomic models. As such, New Cambridge–type models appear to us as an important contribution to the tool kit available to applied

Keywords: Stock-flow Consistent Models, New Cambridge, Aggregate Financial Balances, Heterodox Applied Macroeconomics

JEL Classification: B50, C82, E