In his latest article, Noah Smith repeats a claim that has long bothered me: that mainstream economic models are “stock-flow consistent”. Which is to imply that the very popular research agenda in monetary economics using stock-flow consistent (SFC) methods has little new to add to the mainstream. Because. You know. We got that.
I want to respond with two points. First, a theory is a concept. An idea. Theories can therefore be modelled mathematically in many ways. Second, the stocks and flows of the mainstream are different, theoretically, to those of the monetary economists.…Fresh Economic Thinking
Stock-flow confusion (wonkish)
Cameron K. Murray