Stock-flow-consistent models Accounting Gennaro Zezza Dipartimento di Scienze

Stock-flow-consistent models: Accounting Gennaro Zezza Dipartimento di Scienze Economiche, Università di Cassino and Levy Economics Institute An introduction to SFC models in Eviews Gennaro Zezza Dipartimento di Scienze Economiche – Università degli Studi di Cassino Levy Economics Institute of Bard College – U. S. G. Zezza – Stock-flow-consistent models #2 - Pavia, June 2011 - 1/5

A top-down approach G. Zezza – Stock-flow-consistent models #2 - Pavia, June 2011 - 2/5

Social Accounting Matrix Prod. House Non-holds fin. b. Banks C. Bank C Hous. W Non F. B. Govern ment Ro. W G X TRgh K. Acc. Total I TRfh P Pd TRbh TRnb C. Bank TRgb Ro. W M K. Acc Total Td Yb {TRfc} Yc Fcb Yg {TRgf} d. Vh Y TRfb TRgc {TRbc} Ti Yh Yn Banks Gov. Y d. Vn d. Vb Yh Yn Yb Yf d. Vg Yc d. Vf Yg Yf S I G. Zezza – Stock-flow-consistent models #2 - Pavia, June 2011 - 3/5

Flow of funds Households +DHPMh Central Bank Govern ment Foreign sector Total +I +DHPMb +DD Loans +DBh Equities +DEqh Foreign bills +d. Fh Total d. Vh 0 +{DA} 0 -DD -DL Govt. Bills -DHPM -{DA} CB advances Deposits Banks +I Capital HPM Nonfin. bus. 0 +DL 0 +DBb +DBcb -DB +d. Fb d. Vn d. Vb 0 -DB 0 -d. F {+d. Fcb} 0 +DEqf -DEq +DBf 0 d. Vf +I G. Zezza – Stock-flow-consistent models #2 - Pavia, June 2011 - 4/5

Balance sheets Households +HPMh Central Bank Govern ment Foreign sector Total +K +HPMb +D Loans +Bh Equities +Eqh Foreign bills +Fh Total Vh 0 +{A} 0 -D -L Govt. Bills -HPM -{A} CB advances Deposits Banks +K Capital HPM Nonfin. bus. 0 +L 0 +Bb +Bcb -B +Fb Vn Vb 0 -B 0 -F {+Fcb} 0 +Eqf -Eq +Bf 0 Vf +K G. Zezza – Stock-flow-consistent models #2 - Pavia, June 2011 - 5/5

Models 1. 2. 3. 4. 5. 6. 7. 8. 9. Simple closed economy, exogenous growth Non-zero net worth of firms Portfolio choice Better specification for expectations Endogenous growth Constant-price accounting Endogenous inflation Model with government…? Model with foreign sector…? G. Zezza – Stock-flow-consistent models #2 - Pavia, June 2011 - 6/5