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Comparative numerical analysis of two stock-flow consistent post-Keynesian growth models

Author

Listed:
  • Biagio Ciuffo

    (Institute for Energy and Transport, Joint Research Centre, European Commission, Ispra, Italy)

  • Eckehard Rosenbaum

    (Institute for Environment and Sustainability, Joint Research Centre, European Commission, Ispra, Italy)

Abstract

Stock-flow consistent (SFC) models become complex and hence rather intractable once they seek to incorporate more features of reality. Solving such models numerically for preselected parameter values can help to overcome this problem. But how should the parameters be selected given that there often exists a host of economically plausible values? In order to address this problem, this paper suggests using a Monte Carlo approach to examine which combinations of parameters and starting values (feasibility regions) produce economically meaningful equilibria for the short and long run, and whether the long-term equilibria thus identified are in fact stable. In addition, we undertake a sensitivity analysis for all parameters which allows us to gauge the extent to which model results are driven by certain parameters and starting values.

Suggested Citation

  • Biagio Ciuffo & Eckehard Rosenbaum, 2015. "Comparative numerical analysis of two stock-flow consistent post-Keynesian growth models," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 12(1), pages 113-134, April.
    • Handle: RePEc:elg:ejeepi:v:12:y:2015:i:1:p113-134
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    Citations

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    Cited by:

    1. Dunz, Nepomuk & Naqvi, Asjad & Monasterolo, Irene, 2021. "Climate sentiments, transition risk, and financial stability in a stock-flow consistent model," Journal of Financial Stability, Elsevier, vol. 54(C).
    2. Eckehard Rosenbaum & Biagio Ciuffo, 2017. "Sustainability via Intergenerational Transfers in a Stock-Flow-Consistent Model," Metroeconomica, Wiley Blackwell, vol. 68(1), pages 147-184, February.

    More about this item

    Keywords

    stock-flow consistent model; Monte Carlo method; post-Keynesian growth model; intergenerational transfers; sustainability;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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