Stock-Flow Consistent Modeling Through the Ages

Levy Economics Institute of Bard College Working Paper No. 745

38 Pages Posted: 4 Jan 2013 Last revised: 8 Jan 2013

See all articles by Eugenio Caverzasi

Eugenio Caverzasi

Department of Economic and Social Sciences, Marche Polytechnic University, Ancona; University of Limerick

Antoine Godin

Centre d'économie de l'Université de Paris Nord (CEPN); Agence Française de Développement (AFD); Hans-Boeckler-Stiftung - Macroeconomic Policy Institute (IMK)

Date Written: January 4, 2013

Abstract

The aim of the paper is to provide an overview of the current stock-flow consistent (SFC) literature. Indeed, we feel the SFC approach has recently led to a blossoming literature, requiring a new summary after the work of Dos Santos (2006) and, above all, after the publication of the main reference work on the methodology, Godley and Lavoie’s Stock-flow Consistent Approach (2007). The paper is developed along the following lines. First, a brief historical analysis investigates the roots of this class of models that can be traced as far back as 1949 and the work of Copeland. Second, the competing points of view regarding some of its main controversial aspects are underlined and used to classify the different methodological approaches followed in using these models. Namely, we discuss (1) how the models are solved, (2) the treatment of time and its implication, and (3) the need — or not — of microfoundations. These results are then used in the third section of the paper to develop a bifocal perspective, which allows us to divide the literature reviewed according to both its subject and the methodology. We explore various topics such as financialization, exchange rate modeling, policy implication, the need for a common framework within the post-Keynesian literature, and the empirical use of SFC models. Finally, the conclusions present some hypotheses (and wishes) over the possible lines of development of the stock-flow consistent models.

Keywords: Stock-flow Consistent, Post-Keynesian, Literature Review

JEL Classification: B59, C69, E12

Suggested Citation

Caverzasi, Eugenio and Godin, Antoine, Stock-Flow Consistent Modeling Through the Ages (January 4, 2013). Levy Economics Institute of Bard College Working Paper No. 745. Available at SSRN: https://ssrn.com/abstract=2196498 or http://dx.doi.org/10.2139/ssrn.2196498

Eugenio Caverzasi (Contact Author)

Department of Economic and Social Sciences, Marche Polytechnic University, Ancona ( email )

Piazzale Martelli 8
Ancona, 18039
Italy

University of Limerick ( email )

Limerick
Ireland

Antoine Godin

Centre d'économie de l'Université de Paris Nord (CEPN) ( email )

UMR7115
Université Paris-Nord
Paris XIII
France

Agence Française de Développement (AFD) ( email )

5, rue Roland Barthes
Paris Cedex 12, 75598
France

Hans-Boeckler-Stiftung - Macroeconomic Policy Institute (IMK) ( email )

Hans-Böckler-Straße 39
40476 Düsseldorf
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
194
Abstract Views
953
rank
156,394
PlumX Metrics