Visualising Stock Flow Consistent Models as Directed Acyclic Graphs

11 Pages Posted: 7 Sep 2014

See all articles by Peter Fennell

Peter Fennell

University of Limerick - Department of Mathematics and Statistics

David O'Sullivan

University of Limerick - Department of Mathematics and Statistics

Antoine Godin

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

Stephen Kinsella

University of Limerick

Date Written: September 5, 2014

Abstract

We show how every stock flow consistent model of the macroeconomy can be represented as a directed acyclic graph. The advantages of representing the model in this way include graphical clarity, causal inference, and model specification. We provide many examples implemented with a new software package.

In this paper we rigorously show that for every stock flow consistent macroeconomic model there is a corresponding directed acyclic graph which is unique. This is achieved by constructing the graphical representation of the stock flow consistent model and using graph theoretical techniques to decompose the graph into an acyclic graph. We illustrate the theory with an example, and provide details of a computational package that gives the directed acyclic graph representation of any stock flow consistent model.

Keywords: tock flow consistent models, directed graphs, macroeconomic modeling

JEL Classification: E01, E17, E12, E17

Suggested Citation

Fennell, Peter and O'Sullivan, David and Godin, Antoine and Kinsella, Stephen, Visualising Stock Flow Consistent Models as Directed Acyclic Graphs (September 5, 2014). Available at SSRN: https://ssrn.com/abstract=2492242 or http://dx.doi.org/10.2139/ssrn.2492242

Peter Fennell

University of Limerick - Department of Mathematics and Statistics ( email )

Castletroy, Co
Limerick
Ireland

David O'Sullivan

University of Limerick - Department of Mathematics and Statistics ( email )

Castletroy, Co
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

Stephen Kinsella (Contact Author)

University of Limerick ( email )

Limerick
Ireland
+35361233611 (Phone)
+35361330316 (Fax)

HOME PAGE: http://stephenkinsella.net

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