Veronese Passarella, M orcid.org/0000-0001-7652-5952 (2019) From abstract to concrete: some tips to develop an empirical SFC model. European Journal of Economics and Economic Policies: Intervention, 16 (1). pp. 55-93. ISSN 2052-7764
Abstract
The main purpose of this paper is to show how a simple (medium-scale) empirical stock–flow consistent dynamic model can be developed from scratch. Eurostat data and conventional statistical packages (notably EViews, Excel and R) are used. On the theoretical side, the work builds upon the pioneering work of Godley/Lavoie (2007). Sectoral transactions–flow matrices and balance sheets are explicitly modelled and their evolution over time under different scenarios is analysed. On the empirical side, the model draws upon the applied work of Burgess et al. (2016). The case of Italy is considered, but the model can be replicated for other countries. Eurostat annual data (from 1995 to 2016) are used to estimate or calibrate most model parameter values (for example, consumption function and housing investment parameters). Remaining parameters are borrowed from the available literature or taken from a range of realistic values (for example, weight on past errors in agents' expectations). The model is then used to impose and compare alternative scenarios for Italian sectoral financial balances, based on different shocks to government spending.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © Passarella, 2019. The definitive, peer reviewed and edited version of this article is published in European Journal of Economics and Economic Policies: Intervention, 16 (1). pp. 55-93. |
Keywords: | sectoral balances; flow of funds; macro modelling; Italian economy |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Economics Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 24 Sep 2018 15:52 |
Last Modified: | 01 Oct 2020 00:38 |
Status: | Published |
Publisher: | Edward Elgar Publishing Ltd. |
Identification Number: | 10.4337/ejeep.2019.0044 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:136049 |