Logo
Munich Personal RePEc Archive

On stock-flow consistent approaches and the like: the ‘rediscovery’ of model building

Cavalieri, Duccio (2015): On stock-flow consistent approaches and the like: the ‘rediscovery’ of model building.

[thumbnail of MPRA_paper_67050.pdf]
Preview
PDF
MPRA_paper_67050.pdf

Download (709kB) | Preview

Abstract

This paper on the theoretical foundations of macroeconomic modelling pursues a need of conceptual clarification of a debated methodological problem concerning monetary and fiscal policies. In the first part of the paper the key features of Stock-Flow Consistent Approaches and Modern Monetary Theory are examined, in a critical perspective. These schools of thought consider the interaction between real and monetary factor at an aggregate level and re-propose with minor changes a well known system dynamics methodology, without implementing it and without even mentioning it. They rely on unrealistic and oversimplifying assumptions. Monetary circuit theories are also criticized. In the second part of the essay the guidelines of an alternative theoretical perspective are presented and their policy implications are discussed. Monetary and fiscal policy are not mutually independent. A reasoned choice of policy-mix is suggested.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.