Kaleckian Models of Growth in a Stock Flow Monetary Framework : A Neo - Kaldorian

This paper integrates a stock-flow monetary accounting framework, as proposed by Godley and Cripps (1983) and Godley (1993, 1996, 1999), with Kaleckian models of growth, as proposed by Rowthorn (1981), Dutt (1990) and Lavoie (1995). Our stock-flow accounting is related to the social accounting matrices (SAM) originally developed by Richard Stone in Cambridge, with double-entry bookkeeping used to organise national income and flow of funds concepts. We present a consistent set of sectoral and national balance sheets where every financial asset has a counterpart liability; and budget constraints for each sector describe how the balance between flows of expenditure, factor income and transfers generate counterpart changes in stocks of assets and liabilities. These accounts are comprehensive in the sense that everything comes from somewhere and everything goes somewhere, or to put it more formally, all stocks and flows can be fitted into matrices in which columns and rows all sum to zero. Without this armature, accounting errors may pass unnoticed and unacceptable implications may be ignored.