efficient mechanisms for bilateral trading we consider bargaining problems between one buyer and one seller for a single object the seller s valuation and the buyer s valuation for the object are assumed to be independent random variables and each individual s valuation is unknown to the other we characterize the set of allocation mechanisms that are bayesian incentive compatible and individually rational and show the general impossibility of ex post efficient mechanisms without outside subsidies for a wide class of problems we show how to compute mechanisms that maximize expected total gains from trade and mechanisms that can maximize a broker s expected profit journal of economic literature classification number 026

financialisation income distribution and aggregate demand in the usa this paper investigates the effects of financialisation and functional income distribution on aggregate demand in the usa by estimating the effects of the increase in rentier income dividends and interest payments and housing and financial wealth on consumption and investment the redistribution of income in favour of profits suppresses consumption whereas the increase in the rentier income and wealth has positive effects a higher rentier income decreases investment without the wealth effects the overall effect of the changes in distribution on aggregate demand would have been negative thus a pro capital income distribution leads to a slightly negative effect on growth i e the usa economy is moderately wage led

intermediation and resale in networks i study intermediation via sequential bilateral bargaining in markets with a network structure a partition of the network into layers captures intermediation power competition governs trade withi

agent competition double auction mechanism this paper proposes an agent competition double auction mechanism to simplify decision making and promote transactions for the customer to customer marketplaces under the proposed double auction mechanism bidding one s true valuation private information is the best strategy for each individual buyer and seller even when shipping costs and sales taxes are different across various possible transactions the proposed mechanism also achieves budget balance and asymptotic efficiency furthermore these results not only hold for an environment where buyers and sellers exchange identical commodities but also can be extended to an environment with multiple substitutable commodities

income distribution and current account imbalances we develop a three country stock flow consistent macroeconomic model to study the effects of changes in both personal and functional income distribution on national current account balances each country has a household sector and a non household corporate sector the household sector is divided into income deciles and consumer demand is characterized by upward looking status comparisons following the relative income hypothesis of consumption the strength of consumption emulation depends on country specific institutions the model is calibrated for the united states germany and china simulations suggest that a substantial part of the increase in household debt and the decrease in the current account in the united states since the early 1980s can be explained by the interplay of rising top end household income inequality and institutions on the other hand the weak domestic demand and increasing current account balances of germany and china since the mid 1990s are strongly related to shifts in the functional income distribution at the expense of the household sector

a contribution to the theory of financial fragility and crisis the paper outlines formally three interrelated facets of a financial crisis of domestic origin i a debt financed consumption boom supported by rising asset prices that ends in debt deflation ii a related process of financial evolution of economic agents towards ponzi finance iii resulting systemic illiquidity afflicting the financial sector as a prelude to crisis being placed in relation to theories of exogenous and endogenous money the models indicate how the co evolution of the real and the financial sector results in financial fragility of different types the paper explores formally the specific features of the fragility of various episode of crisis which share a common pattern of gradual build up followed by a sudden collapse of financial confidence through the interaction between the real and the financial sector and concludes with implications for policy copyright the author 2011 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

a minsky crisis a model is developed to illustrate hyman minsky s financial crisis theories a key assumption is that the level of wealth in the economy is determined mac roeconomically with the value of firms assets responding to the state of confidence as reflected by discounted quasi rents on capital the second assumption is that there is high substitutability between liabilities of firms and money in the public s portfolio a downward shift in anticipated profits leads wealth to contract and the public to shift portfolio preferences toward money interest rates rise leading to further dampening of expected profits and a debt deflation crisis can occur

finance saving and accumulation this paper analyzes the interaction between financial and real variables in different time frames and monetary regimes firms finance investment through retained earnings new issues or bank loans and households desired portfolio of financial assets is related to current income flows the average saving propensity becomes an endogenous variable determined jointly by household and firm decisions and it is shown that changes in the basic parameters give rise to both saving and valuation effects contrary to standard keynesian results an increase in a saving parameter may be expansionary if the valuation effect dominates the saving effect copyright 1988 by oxford university press

money and credit in a keynesian model of income determination this paper integrates the theory of money and credit derived ultimately from wicksell into the keynesian theory of income determination with assets allocated according to tobinesque principles the model deployed has much in common with the modern endogenous money school initiated by kaldor which emphasises the essential role played by credit in any real life economy since production takes time and the future is always uncertain new ground is broken methodologically because all the propositions are justified by simulations of a rigorous 60 equation model making it possible to pin down exactly why the results come out as they do one conclusion of the paper is that there is no such thing as a supply of money distinct from the money which agents wish to hold or find themselves holding this finding is inimical possibly in the end lethal to the way macroeconomics is currently taught as well as to the neoclassical paradigm itself

post keynesian stock flow consistent modelling a survey the aim of the paper is to provide an overview of the current stock ow consistent sfc literature indeed we feel the sfc approach has recently led to a blossoming literature requiring a new summary after the work of dos santos and above all after the publication of the main reference work on the methodology godley and lavoie s monetary economics an integrated approach to credit money income production and wealth the paper is developed along the following lines first a brief historical analysis investigates the roots of this class of models that can be traced as far back as 1949 and the work of copeland second the competing points of view regarding some of its main controversial aspects are underlined and used to classify the different methodological approaches followed in using these models namely we discuss i how the models are solved ii the treatment of time and its implication and ii the need or not for microfoundations these results are then used in the third section of the paper to develop a bifocal perspective which allows us to divide the literature reviewed according to both its subject and the methodology we explore various topics such as financialisation exchange rate modelling policy implication the need for a common framework within the post keynesian literature and the empirical use of sfc models finally the conclusions present some hypotheses and wishes for the possible lines of development of sfc models

trading in networks theory and experiments intermediation is a prominent feature of economic production and exchange two features of intermediation are salient coordination among traders between the source and the destination and competition between alternative combinations of intermediaries we develop a simple model to study these forces and we test the theoretical predictions in experiments our theoretical analysis yields a complete characterization of pricing equilibrium in networks there exist both ecient and inecient equilibria suggesting a key role of coordination among intermediaries strategic interaction leads to either buyer and seller retaining all surplus or intermediaries extracting all surplus we develop conditions on network structure under which these di erent extremal outcomes arise respectively laboratory experiments show that eciency prevails in almost all cases so traders are successful in coordination subjects coordinate on extreme surplus division finally experiments highlight the role of network structure in determining pricing and the

elicitation of honest preferences for the assignment of individuals to positions the problem of eliciting honest preferences from individuals who must be assigned to a set of positions is considered individuals know that they will be charged for the positions to which they are assigned a set of prices that provide no incentive for the individual to misrepresent his preferences is suggested it is shown that these prices constitute an element of the optimal solution to the dual of a linear programming assignment problem both the optimal allocation and the prices to be charged can be derived by solving two linear programming problems once preferences have been elicited the procedure can usefully be viewed as a simulation of a competitive market under conditions where such a market cannot be expected to function well it results in an efficient allocation where all resources are valued at their opportunity costs and consumer surplus is maximized its outcome thus has the desirable properties of competitive market equilibria

the role of networks in antitrust investigations antitrust investigations typically focus on the competitive pressures coming from within the defined markets of interest however competitive pressures can also come from other markets even when individually these markets place only weak constraints on one another collectively they may matter a networks approach to modelling competition permits a systemic view of competition that can sometimes paint a more accurate picture we demonstrate this through some simple examples and show more generally how tools from the networks literature can be applied to capture competition across a system of interrelated markets as a leading example we consider antitrust investigations into supermarkets where local geographic markets have been used as the basis of investigation

heterodox theories of economic growth and income distribution a partial survey heterodox theories of economic growth and income distribution are surveyed focusing on major theories and recent contributions first a general framework for examining growth and distribution is discussed in terms of which classical marxian and post keynesian kaleckian and other theories are presented since this framework examines how variables are determined in equilibrium second dynamics behind equilibria are examined focusing on goods market and labor market changes third the framework is extended in a variety of ways to examine additional models addressing productivity growth and technical change money and inflation finance and debt additional distributional considerations multisector issues open economy questions and the environment it is concluded that the literature on heterodox theories of growth and distribution is vibrant large and growing and addresses many issues that are ignored or neglected in orthodox theories including power unemployment and aggregate demand

emergence of new economics energy transition models a review abstract well known academic and non academic institutions call for a new approach in economics able to capture features of modern economies including but not limited to complexity non equilibrium and uncertainty in this paper we provide a systematic review of ecological macroeconomic models that are suitable for the investigation of low carbon energy transitions and assess them based on the features considered desirable for a new approach in economics we draw two main conclusions firstly the knowledge base and structure of these existing ecological macroeconomic models are relevant alongside other types of models for the creation of a new approach in economics secondly the reviewed models are policy relevant especially in the context of the complexity and urgency of rapid energy transitions where increasingly policymakers require economic models able to capture real world characteristics however further improvements are needed to these models and future research should focus on i assuring comparability of models results and their policy insights ii incorporation of the relationships between macroeconomics finance and sustainability and iii the institutionalization of a new approach in economics

a synthetic stock flow consistent macroeconomic model of financialisation this article is centred around the notions of shareholder value orientation and financialisation shareholder value orientation is reflected by a high dividend payout ratio applied by firms and the reluctance of firms to finance physical investment via new equity issues financialisation is the more general development towards an increased importance of the financial sector of the economy relative to the non financial sector in this article a synthetic stock flow consistent model is developed that attempts to encompass some important recent works on the effects of financialisation this includes contributions from the fields of mainstream information economics and post keynesian economics we conduct simulations reflecting increased shareholder value orientation and show that the results are consistent with important stylised facts copyright the author 2008 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

exchange rate indeterminacy in portfolio balance mundell fleming and uncovered interest rate parity models with full stock flow accounting respected the two country open economy portfolio balance model has just two independent equations for asset market clearing it can determine home and foreign interest rates but not the exchange rate if asset market equilibria vary smoothly over time the balance of payments equation in the mundell fleming model is not independent and cannot set the exchange rate either the familiar fixed reserves floating rate vs endogenous reserves fixed rate dichotomy does not exist and fundamentals based econometric models of the exchange rate are bound to fail an alternative is a two country is lm model with exchange rate dynamics added its dynamic properties under uncovered interest rate parity are briefly explored copyright 2004 oxford university press

a theory of buyer seller networks this paper introduces a new model of exchange networks rather than markets of buyers and sellers it begins with the empirically motivated premise that a buyer and seller must have a relationship a link to exchange goods networks buyers sellers and the pattern of links connecting them are common exchange environments this paper develops a methodology to study network structures and explains why agents may form networks in a model that captures characteristics of a variety of industries the paper shows that buyers and sellers acting strategically in their own self interests can form the network structures that maximize overall welfare

firms leverage ratio and the financial instability hypothesis an empirical investigation for the us economy 1970 2014 there are many minskian interpretations of how financial fragility builds up reflecting the unsolved tensions regarding the transition from micro to macro results in minsky s financial instability hypothesis fih using firm level and macroeconomic data to comply with the variety of fih s interpretations we empirically assess the relations between leverage and financial fragility in the us economy 1970 2014 to evaluate firms financial fragility we deploy minsky s scale from the financially sounder to the more fragile firms hedge speculative and ponzi the main findings are the following i the evolution of the aggregate leverage ratio does not account for the systemic financial fragility measured by the frequency of speculative and ponzi firms and ii within the biggest firms the leverage has increased along with the incidence of hedge financing and for the smallest firms group the opposite has happened we conclude that a positive relation between leverage and financial fragility cannot be deemed to be a general outcome

budgetary rigour with stimulus in lean times policy advices from an agent based model abstract the 2008 financial crisis and the subsequent global recession triggered a wide spread economic and political debate on the proper policy combination to deal with the crisis and to prevent similar ones in the future probably the main dispute has been around the use of fiscal instruments in order to foster growth while keeping public debt under control the european union for instance endorsed austerity measures for fiscal consolidation but has been sharply criticized by several scholars this paper aims at contributing to the current debate by presenting the outcomes of a computational study performed with the eurace agent based model we set up an experiment with two base policy scenarios i e stability and growth pact and fiscal compact incrementally enriching them with complementary policies which relax fiscal rigidity and introduce quantitative easing results show that budgetary rigour performs well if and only if some mechanisms of fiscal relaxation and monetary accommodation are considered during bad times thus confirming in a richer and more realistic model setting the fundamental tenet of keynesian economics about the importance of sustaining aggregate demand during recessions

the package assignment model we study assignment problems where individuals trade packages consisting of several rather than single objects although buyers reservations values are non additive efficient assignments can be formulated as a linear programming problem in which the pricing functions expressing duality may be non linear in the objects constituting the packages the interconnections among the linear programming formulation walrasian equilibrium and the core are established in the single seller auction version a necessary and sufficient condition is given for the vickrey payoff point to be implementable by a pricing equilibrium journal of economic literature classification numbers c62 d44 d51

bertrand competition under network externalities abstract two firms engage in price competition to attract buyers located on a network the value of the good of either firm to any buyer depends on the number of neighbors on the network who adopt the same good when the size of externalities increases linearly with the number of adoptions we identify the set of pricing strategies that are consistent with an equilibrium in which one of the firms monopolizes the market the set includes marginal cost mc pricing as well as bipartition pricing which offers discounts to some buyers and charges markups to others we show that mc pricing fails to be an equilibrium under non linear externalities in a general network but identify conditions for an equilibrium with bipartition pricing to be robust against perturbations in the externalities from linearity the analysis is applied to platform competition in a two sided market under local and approximately linear externalities

macroeconomic implications of financialisation a growing literature suggests that financialisation may weaken the performance of non financial corporations and constrain the growth of aggregate demand this paper uses two alternative approaches one derived from skott and one from lavoie and godley and two different settings a labour constrained setting and a dual economy setting to evaluate some of the claims that have been made our analysis which pays explicit attention to financial stock flow relations suggests that the qualitative effects of financialisation are insensitive to the precise specification of household saving behaviour but depend critically on the labour market assumptions labour constrained versus dual and the specification of the investment function harrodian versus kaleckian

delay in trade networks we study decentralized markets involving producers and consumers that are facilitated by middlemen we do this by analyzing a noncooperative networked bargaining game we assume a complete information setup wherein all the agents know the structure of the network the values of the consumers and the transaction costs involved but allow for some search friction when either producers or consumers trade with middlemen in such a setting we show that sunk cost problems and a heterogeneous network can give rise to delay or failure in negotiation and therefore reduce the total trade capacity of the network in the limiting regime of extremely patient agents we provide a sharp characterization of the trade pattern and the segmentation of these markets

a simple model of three economies with two currencies the eurozone and the usa this paper presents a keynesian model which describes three countries trading merchandise and financial assets with one another it is initially assumed that all three countries have independent fiscal policies but that two of the countries share a currency hence the model can be used to make a preliminary analysis of the conduct of economic policy in the eurozone vis a vis the rest of the world the usa the main conclusion will be that if all three countries do indeed operate independent fiscal policies the system will work under a floating currency regime but only so long as the european central bank is prepared to modify the structure of its assets by accumulating an ever rising proportion of bills issued by any weak euro country

a foxy hedgehog wynne godley and macroeconomic modelling wynne godley has made enormous contributions to macroeconomic modelling they are reviewed here in connection with his recent book with marc lavoie monetary economics an integrated approach to credit money income production and wealth copyright the author 2008 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

bilateral trading in networks in many markets goods flow from initial producers to final customers travelling through many layers of intermediaries and information is asymmetric we study a dynamic model of bargaining in networks that captures these features we show that the equilibrium price demanded over time is non monotonic but the sequence of transaction prices declines over time with the possible exception of the last period the price dynamic is therefore reminiscent of fire sales and hot potato trading traders who intermediate the object arise endogenously and make a positive profit the profit earning intermediaries are not necessarily traders with many connections for the case of multilayer networks they belong to the path that reaches the maximum number of potential buyers using the minimal number of intermediaries this is not necessarily the path of the network that maximizes the probability of consumption by traders who value the most the object i e welfare

a stock flow consistent macro econometric model of the uk economy part i this paper is the second of a series of two which describe the estimation and simulation of a stock flow consistent macro economic model of the uk economy the first part davis 1987 surveyed the theoretical literature on stock adjustment dynamics criticized existing uk forecasting models for omitting many potential stock flow interactions and gave an outline of the model which is constructed here the estimation and simulation results suggest that variables encapsulating such stock flow effects are frequently significant in the estimation of key equations and that their inclusion may make a sizeable difference to the simulation properties of a model

liquidity risk in sequential trading networks abstract this paper studies a model of intermediated exchange with liquidity constrained traders intermediaries are embedded in a trading network and their financial capacities are private information we characterize our model s monotone pure strategy equilibrium agents earn positive intermediation rents in equilibrium an experimental investigation supports the model s baseline predictions concerning agents strategies price dynamics and the division of surplus while private financial constraints inject uncertainty into the trading environment our experiment suggests they are also a behavioral speed bump preventing traders from experiencing excessive losses due to overbidding

efficiency and stability of a financial architecture with too interconnected to fail institutions abstract the regulation of large interconnected financial institutions has become a key policy issue to improve financial stability regulators have proposed limiting banks size and interconnectedness i estimate a network based model of the over the counter interbank lending market in the us and quantify the efficiency stability implications of this policy trading efficiency decreases with limits on interconnectedness because the intermediation chains become longer while restricting the interconnectedness of banks improves stability the effect is non monotonic stability also improves with higher liquidity requirements when banks have access to liquidity during the crisis and when failed banks depositors maintain confidence in the banking system

middlemen in bilateral search markets this article examines the role of middlemen in bilateral search markets e g employment agencies real estate brokers it is shown that the middleman narrows the set of buyer firm and seller worker types who search seller types with high valuations and buyer types with low valuations drop out of the search market and instead trade through the middleman the middleman also decreases the equilibrium search intensities of those agents who search it is proven that the middleman improves welfare if search is very costly and inefficient and decreases welfare if search is effectively costless and very efficient

peering over the edge of the short period the keynesian roots of stock flow consistent macroeconomic models this work argues that institutionally rich stock flow consistent models i e models in which economic agents are identified with the main social categories institutional sectors of actual capitalist economies the short period behaviour of these agents is thoroughly described and the period by period balance sheet dynamics implied by the latter is consistently modelled are i perfectly compatible with keynes theoretical views ii the ideal tool for rigorous post keynesian analyses of the medium run and therefore iii crucial to the consolidation of the broad post keynesian research programme copyright the author 2009 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

the impact of phasing out fossil fuel subsidies on the low carbon transition abstract there is growing consensus on the fact that fossil fuel subsidies provided by governments in high income countries represent a misalignment on emissions reduction with the global climate agenda in addition a discussion emerged on the negative socio economic and environmental externalities associated with fossil fuel subsidies nevertheless pathways for phasing out fossil fuel subsidies in high income countries and their implications on the low carbon transition have not yet been assessed with the aim to narrow this knowledge gap we extend the eirin stock flow consistent behavioral model to study the implications on sustainable development of the gradual phasing out of fossil fuels subsidies whose revenues could be used by the government to subsidize energy investments in green capital e g solar panels either via fiscal policies or green bonds we assess the effects on green growth employment credit and bonds market as well as the distributive effects across heterogeneous households and sectors a smooth phasing out of fossil fuels subsidies contributes to improve macroeconomic performance to decrease inequality and helps the government to find fiscal space to support stable renewable energy policies renewable energy subsidies contribute to foster the low carbon transition but could imply distributive effects depending on the way in which they are implemented

trading networks with price setting agents abstract in a wide range of markets individual buyers and sellers trade through intermediaries who determine prices via strategic considerations typically not all buyers and sellers have access to the same intermediaries and they trade at correspondingly different prices that reflect their relative amounts of power in the market we model this phenomenon using a game in which buyers sellers and traders engage in trade on a graph that represents the access each buyer and seller has to the traders we show that the resulting game always has a subgame perfect nash equilibrium and that all equilibria lead to an efficient allocation of goods finally we analyze trader profits in terms of the graph structure roughly a trader can command a positive profit if and only if it has an essential connection in the network thus providing a graph theoretic basis for quantifying the amount of competition among traders

towards an accounting view on money banking and the macroeconomy history empirics theory in this paper three views are considered which are traditionally associated with money cranks and brave heretics the first is that the credit nature of money has macroeconomic significance the second is that financial development can be bad for economic growth the third is that macroeconomic models need to be explicitly monetary macroeconomic models it is argued that in each of these three areas there has been a recent shift in mainstream economic opinion this suggests new opportunities for meaningful debate between heterodox and orthodox schools on money and finance it is further argued following skaggs 2003 that a common meeting ground could be an accounting view of economics this is a mode of macroeconomic analysis which explicitly uses accounting definitions identities that credit is also debt or that flows of a variable affect the stock of that variable or accounting methods e g decomposing different kinds of liabilities or linking flows of liquidity to flows of transactions to structure and direct the analysis the accounting view is highly pluralist yet clearly defined i discuss its applications to each of the three views

the informational divide we propose a model of price competition where consumers exogenously differ in the number of prices they compare our model can be interpreted either as a non sequential search model or as a network model of price competition we show that i if consumers who previously just sampled one firm start to compare more prices all types of consumers will expect to pay a lower price and ii if consumers who already sampled more than one price sample even more prices then there exists a threshold the informational divide such that all consumers comparing fewer prices than this threshold will expect to pay a higher price whereas all consumers comparing more prices will expect to pay a lower price than before thus increased search can create a negative externality and it is not necessarily beneficial for all consumers

multi item auctions a collection of items is to be distributed among several bidders and each bidder is to receive at most one item assuming that the bidders place some monetary value on each of the items it has been shown that there is a unique vector of equilibrium prices that is optimal in a suitable sense for the bidders in this paper we describe two dynamic auction mechanisms one achieves this equilibrium and the other approximates it to any desired degree of accuracy

the cambridge school of keynesian economics there have been strong ties between the cambridge journal of economics cje and the cambridge school of keynesian economics from the very beginning in this paper the author investigates the environment that saw the birth of the cje at cambridge uk in 1977 and the relationship that linked it to the direct pupils of keynes a critical question is explicitly examined why didn t the keynesian revolution succeed in becoming a permanent winning paradigm some behavioural mistakes of the members of the keynesian school may explain this lack of success but only to a certain extent in any case there were and there still are remedies too but what we are inheriting is a unique set of analytical building blocks the paper lists eight of them that makes this school of economics a viable and in some directions definitely superior alternative to mainstream economics admittedly there is some important work still to be done the paper highlights the need for a two stage approach addressing pure theory and extensive institutional analysis it is argued that a combination of the two would strengthen the coherence of the theoretical foundations and at the same time would provide a fruitful extension of economic analysis to empirical institutional and economic dynamics investigations copyright 2005 oxford university press

a simplified stock flow consistent dynamic model of the systemic financial fragility in the new capitalism in the last few years many financial analysts and heterodox economists but even some dissenters among orthodox economists have referred to the contribution of hyman p minsky as fundamental to understanding the current crisis however it is well known that the traditional formulation of minsky s financial instability hypothesis shows serious internal logical problems furthermore minsky s analysis of capitalism must be updated on the basis of the deep changes which during the last three decades have concerned the world economy in order to overcome these theoretical and empirical troubles this paper first introduces the reader to the mechanics of the financial instability theory according to the formulation of the traditional minskian literature section 2 second it shows why minsky s theory cannot be regarded as a general theory of the business cycle section 3 third the paper attempts to supply a simplified but consistent re formulation of minsky s theory by inter breeding it with inputs coming from the new cambridge theories and the current formal minskian literature the aim of this is to analyze the impact of both capital asset inflation and consumer credit on the financial soundness of the non financial business sector sections 4 7 some concluding remarks are provided in the last part of the paper section 8

toward a new microfounded macroeconomics in the wake of the crisis the great recession that followed the financial crisis of 2007 is not only the largest economic crisis after the great depression of the 1930s it also signals a crisis of economics as a discipline this is not only the consequence of the inadequacy of mainstream macroeconomics and specifically the dynamic stochastic general equilibrium dsge workhorse model to forecast such a huge event or at least to detect the worrying tendencies towards it even more relevant is the choice to explicitly avoid the modeling of large crises that for someone is a motivation for not attacking pre crisis dsge models focused on the analysis of small deviations from the steady state so denying the intrinsic nature of capitalism a system that necessarily proceeds through cycles and extended crises the replies of the dsge approach to critics have led to extensions regarding for instance the role of financial frictions heterogeneous agents and bounded rationality though typically in the form of quasi rational expectations the alternative paradigm of agent based ab macroeconomics can take into account all these elements at once within an evolutionary modeling framework based on heterogeneity and interaction so capable to endogenously reproduce complex dynamics from small fluctuations to large crises due to innovation and industrial dynamics rising inequality and financial instability and so on the integration between ab macroeconomics and the post keynesian stock flow consistent approach represents a promising way for the future development of this research field

stock flow consistent macroeconomic models a survey the stock flow consistent sfc modelling approach grounded in the pioneering work of wynne godley and james tobin in the 1970s has been adopted by a growing number of researchers in macroeconomics especially after the publication of monetary economics by godley and lavoie which provided a general framework for the analysis of whole economic systems and the recognition that macroeconomic models integrating real markets with flow of funds analysis had been particularly successful in predicting the great recession of 2007 2009 we introduce the general features of the sfc approach for a closed economy showing how the core model has been extended to address issues such as financialization and income distribution we next discuss the implications of the approach for models of open economies and compare the methodologies adopted in developing sfc empirical models for whole countries we review the contributions where the sfc approach is being adopted as the macroeconomic closure of microeconomic agent based models and how the sfc approach is at the core of new research in ecological macroeconomics finally we discuss the appropriateness of the name sfc for the class of models we survey

long waves and short cycles in a model of endogenous financial fragility this paper presents a stock flow consistent macroeconomic model in which financial fragility in firm and household sectors evolves endogenously through the interaction between real and financial sectors changes in firms and households financial practices produce long waves the hopf bifurcation theorem is applied to clarify the conditions for the existence of limit cycles and simulations illustrate stable limit cycles the long waves are characterized by periodic economic crises following long expansions short cycles generated by the interaction between effective demand and labor market dynamics fluctuate around the long waves

from poverty to perversity ideas markets and institutions over 200 years of welfare debate to understand the rise of market fundamentalism from the margins of influence to mainstream hegemony we compare the u s 1996 personal responsibility and work opportunities reconciliation act and the english 1834 new poor law two episodes in which existing welfare regimes were overturned by market driven ones despite dramatic differences across the cases both outcomes were mobilized by the perversity thesis a public discourse that reassigned blame for the poor s condition from poverty to perversity we use the term ideational embeddedness to characterize the power of such ideas to shape structure and change market regimes the success of the perversity thesis is based on the foundations of social naturalism theoretical realism and the conversion narrative in the poverty to perversity conversion narrative structural blame for poverty is discredited as empiricist appearance while the real problem is attributed to the corrosive effects of welfare s perverse incentives on poor people themselves