Fiscal Policy in a Stock-Flow Consistent (SFC) Model

Fiscal Policy in a Stock - Flow Consistent ( SFC ) Model by Wynne Godley and Marc Lavoie * April 2007

Fiscal policy, long-run growth, and welfare in a stock-flow model of public goods

We introduce public capital and public services as inputs in an endogenous growth model. We show that the growth rate depends on the apportionment of tax revenues between the accumulation of public capital and the provision of public services. When public spending is financed by proportional income taxes, the growth rate, the level of public spending as a proportion of GDP, the level of investm...

Regime-changes in a Stock-flow-consistent Model

We explore the dynamical properties of the Godley-Lavoie model with a focus on Central Bank horizons. The stability properties of modes of regulation are traced from a regime of private bank money to the current crisis with the Central Bank levers of short-term bonds issue to the emerging policy regime of long-term bonds as built-in stabilizers.

Stock-flow Consistent Modeling through the Ages

Optimal time-consistent monetary and fiscal policy under sticky prices

This paper studies optimal monetary and fiscal policy in a stochastic economy with sticky prices and monopolistic competition on its product markets. Our main objective is to characterize optimal time-consistent (Markov) policies and to compare their characteristics to the ones implemented by a Ramsey policy maker. We perform this comparison within the framework of a stochastic production econo...