A dynamic model of financial balances for the United Kingdom

Stephen Burgess, Oliver Burrows (), Antoine Godin, Stephen Kinsella () and Stephen Millard
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Oliver Burrows: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH

No 614, Bank of England working papers from Bank of England

Abstract: We construct a new scenario analysis model for the United Kingdom using ONS data from 1987 to the present. The model links decisions about real variables to credit creation in the financial sector and decisions about asset allocation among investors for a wide array of financial assets. We develop, estimate, and calibrate the model from first principles as well as describing the stock-flow coherent database we construct to validate the model. We impose several scenarios on the model to test its usefulness as a medium term scenario analysis tool, including increases in banks’ capital ratios, sudden stops, changes in investment, increases in house prices and fiscal expansions.

Keywords: Sectoral balances; flow of funds; macroeconomic modelling (search for similar items in EconPapers)
JEL-codes: E21 E22 E25 E37 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2016-09-02
New Economics Papers: this item is included in nep-mac and nep-sog
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:0614

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