Sfc Models — Novel Working Paper

Modeling economical forces, might relations, too stock-flow consistency:a full general constrained dynamics approach

by Oliver Richters too Erhard Gloetzl

Abstract: In monetary Stock-Flow Consistent (SFC) models, accountingidentities trim the lay out of behavioral functions to avoid anoverdetermined organization of equations. We relax this restriction using adifferential algebraic equation framework of constrained dynamics.Agents exert forces on the variables according to their desire, forinstance to gradually meliorate their utility. The parameter ‘economicpower’ corresponds to their might to assert their interest. Inanalogy to Lagrangian mechanics, organization constraints generate additionalconstraint forces that Pb to unintended dynamics. We exemplify theprocedure using a elementary SFC model too break its implicit assumptionsabout might relations too agents’ preferences.

Link: https://ideas.repec.org/p/old/dpaper/409.html

sfc models
New working paper

See also

SFC labs at the annual Minsky Summer Seminar