Brian Romanchuk — A SFC Model Of Gold Standard Austerity Policies

This article describes the model that I discussed in an earlier video. Although a Gold Standard is not exactly a pressing topic for most of us, the simplicity of the system makes it easy to demonstrate ways in which we can use stock-flow consistent (SFC) models. In this case, I can explain why austerity was a core component of gold standard thinking....

Why should you care about the gold standard? Because Alan Greenspan said that central banks act as if the world is still on the gold standard. This demands a tighter fiscal stance and more cramped fiscal space than operating under the floating rate monetary system that exists now. The result is demand insufficient to economic potential.

Bond Economics
A SFC Model Of Gold Standard Austerity Policies
Brian Romanchuk