Stock-Flow Consistent Monetary Economics

Steven Hail ()
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Steven Hail: University of Adelaide

Chapter Chapter 6 in Economics for Sustainable Prosperity, 2018, pp 183-218 from Palgrave Macmillan

Abstract: Abstract The focus in this chapter is on Wynne Godley and Marc Lavoie’s contribution to stock-flow consistent macroeconomics. The Godley and Lavoie models describe economies as systems of shifting and interlocking balance sheets, evolving through time. A simplified open economy stock-flow consistent model of a growing economy is outlined, used to carry out a policy experiment concerning the relative effectiveness of monetary and fiscal policy, in order to show that fiscal policy is the appropriate demand management tool for the maintenance of full employment and sustainable prosperity. This is linked to the use of a job guarantee to identify the appropriate fiscal stance for this purpose.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:pal:bifchp:978-3-319-90981-3_6

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DOI: 10.1007/978-3-319-90981-3_6

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