A Post-Keynesian Stock-Flow Consistent Macroeconomic Growth Model: Preliminary Results

Levy Economics Institute Working Paper No. 402

41 Pages Posted: 28 Feb 2004  

Claudio H. Dos Santos

The Levy Economics Institute

Gennaro Zezza

University of Cassino - Department of Economics; Bard College - The Levy Economics Institute

Date Written: February 2004

Abstract

Stock-flow consistent models may be considered the rallying point for heterodox authors interested in modeling macroeconomic relations, since these models incorporate real and financial relations in an entirely consistent way, therefore providing macroeconomic constraints to individual behavior. The present model expands on the Godley-Lavoie model of growth, which was based on a two-asset world, with only bank deposits and the shares issued by private corporations. The present model incorporates the financial relations among the central bank, private banks, and the fiscal policy of government, showing the endogeneity of money under different assumptions on banks' behavior. The model is used to analyze the relationship between the distribution of income and growth, and to study the impact of monetary policy.

Keywords: stock-flow models, growth models, distribution of income, monetary policy

JEL Classification: E1, E12, E17, E63

Suggested Citation

Dos Santos, Claudio H. and Zezza, Gennaro, A Post-Keynesian Stock-Flow Consistent Macroeconomic Growth Model: Preliminary Results (February 2004). Levy Economics Institute Working Paper No. 402. Available at SSRN: https://ssrn.com/abstract=509122 or http://dx.doi.org/10.2139/ssrn.509122

Claudio H. Dos Santos (Contact Author)

The Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504
United States
845-758-7700 (Phone)
845-758-1149 (Fax)

Gennaro Zezza

University of Cassino - Department of Economics ( email )

Cassino
Italy

HOME PAGE: http://gennaro.zezza.it

Bard College - The Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504-5000
United States

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