Sectoral Balances And Stock-Flow Consistent Models

Jan Jonáš and Ondřej Komínek
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Jan Jonáš: Masaryk University, Brno, Czech Republic
Ondřej Komínek: Masaryk University, Brno, Czech Republic

Journal of Economic Integration, 2017, vol. 32, issue 3, 689-722

Abstract:

The European banking and sovereign debt crisis has revealed severe financial imbalances among countries and institutional sectors. In reaction, economic policy and theory has focused on the role of finance in mitigating economic imbalances and finding ways to deal with them. Policy makers launched data gap initiatives to enhance economic and financial statistics, an important pillar of these initiatives being the integrated framework of the System of National Accounts, unifying product, income, capital, and financial accounts. In this framework, there are elaborated Stock-Flow Consistent models that model any interconnections of institutional sectors, in both real and financial aspects, in a consistent way. This article aims to illustrate the principles and possibilities of Stock Flow Consistent models and their relation to the System of National Acounts. To accomplish this, we construct a simplified Stock Flow Consistent model applied to the sectoral (im)balances between the private, government, and foreign sectors, which were a notable feature of the recent European crisis.

Keywords: Stock-Flow Consistent Models; System of National Accounts; Financial Accounts; ESA 2010; Euro Crisis (search for similar items in EconPapers)
JEL-codes: B50 C69 E12 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0724

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