Stock-Flow Consistent Model with Repayment of Bank Loans Used to Finance Past Investments

Edouard Cottin-Euziol () and Nicolas Piluso ()
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Edouard Cottin-Euziol: ACT - Analyse des Crises et Transitions - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - Université Sorbonne Paris Nord
Nicolas Piluso: CERTOP - Centre d'Etude et de Recherche Travail Organisation Pouvoir - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - UT3 - Université Toulouse III - Paul Sabatier - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - CNRS - Centre National de la Recherche Scientifique, IUT Toulouse Auch Castres - Institut Universitaire de Technologie - Paul Sabatier - UT3 - Université Toulouse III - Paul Sabatier - Comue de Toulouse - Communauté d'universités et établissements de Toulouse, Comue de Toulouse - Communauté d'universités et établissements de Toulouse

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Abstract: Stock-flow consistent modelling (SFC) is currently one of the most active fields of research in post-Keynesian macroeconomics. SFC models make it possible to study the dynamics of a monetary economy of production within a consistent accounting framework. However, with some rare exceptions, SFC models do not take into account the repayment of bank loans used to finance business investments. It is assumed that these investments are financed by perpetual loans or by constant turnover. In this article, we reject this assumption and build a model based on recent studies, in which firms repay part of their past debt in each period. We then study the dynamics of this model. The results obtained indicate that the dynamics of an SFC model is significantly affected by taking these repayments into account.

Date: 2021-08-04
Note: View the original document on HAL open archive server: https://hal.science/hal-02512079v2
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Published in Review of Political Economy, 2021, 35 (2), pp.454-475. ⟨10.1080/09538259.2021.1947659⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02512079

DOI: 10.1080/09538259.2021.1947659

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