A spreadsheet version of the IS/MY model (alternative to IS/LM model) — Dirk Ehnts

I hope that this model will be taken up by more colleagues as it is very clear now that the IS/LM model “does not work”. If you make it more realistic by saying that investment does not depend on the rate of interest (vertical IS curve) and that the central bank determines the interest rate (horizontal LM curve), then you will have wasted 3-4 lectures to explain the goods market (IS curve) and the money market (LM curve) only to conclude that both do not matter in practice. It is only a small step from there to conclude that teaching the IS/LM model is a waste of time. You might just say that “demand determines supply, which determines employment” and that “government spending and private investment, which both do not depend on the rate of interest, increase demand”. Your students will easily get it and you save 3-4 lectures for something else, like my IS/MY model.

Bravo! A big step in the right direction in teaching Econ 101. And it is not just Econ 101, Paul Krugman has basically stated that he uses the IS/LM as his macroeconomic lens.

econoblog 101
A spreadsheet version of the IS/MY model (alternative to IS/LM model)
Dirk Ehnts | Lecturer at Bard College Berlin, research assistant at the Technical University of Chemnitz, and spokesperson of the board of Pufendorf-Gesellschaft eV in Berlin

Brian Romanchuk — "An Introduction to SFC Models Using Python" Paperback Edition Published

My latest book: An Introduction to SFC Models Using Python is now available as a paperback edition.…

Stock-Flow Consistent (SFC) models are a preferred way to present economic models in the post-Keynesian tradition. This book gives an overview of the sfc_models package, which implements SFC models in Python. The approach is novel, in that the user only specifies the high-level parameters of the economic model, and the framework generates and solves the implied equations. The framework is open source, and is aimed at both researchers and those with less experience with economic models. This book explains to researchers how to extend the sfc_models framework to implement advanced models. For those who are new to SFC models, the book explains some of the basic principles behind these models, and it is possible for the reader to run example code (which is packaged with the software online) to examine the model output....

Bond Economics
"An Introduction to SFC Models Using Python" Paperback Edition Published
Brian Romanchuk

Jason Smith — Post Keynesian blues

Jason Smith comments on Post Keynesianism in light of the debate begun by Noah Smith on "occultism."

Information Transfer Economics
Post Keynesian blues
Jason Smith

Jason Smith — Supply, demand, stock, flow

Stocks and flows in physics related to econ with respect to information.

Information Transfer Economics
Supply, demand, stock, flow
Jason Smith

Patrizio Lainà — Money Creation under Full-reserve Banking: A Stock-flow Consistent Model

ABSTRACT

This paper presents a stock-flow consistent model+ of full-reserve banking. It is found that in a steady state, full-reserve banking can accommodate a zero-growth economy and provide both full employment and zero inflation. Furthermore, a money creation experiment is conducted with the model. An increase in central bank reserves translates into a two-thirds increase in demand deposits. Money creation through government spending leads to a temporary increase in real GDP and inflation. Surprisingly, it also leads to a permanent reduction in consolidated government debt. The claims that full-reserve banking would precipitate a credit crunch or excessively volatile interest rates are found to be baseless.

The Levy Economics Institute Of Bard College
Working Paper No. 851

Money Creation under Full-reserve Banking: A Stock-flow Consistent Model
Patrizio Lainà, University of Helsinki
October 2015

Dirk Ehnts — Reading Mensik’s “The Origins of the Income Theory of Money”

Important. Putting money flow back in economics. Again, resurrecting what had been forgotten.

Josef Mensik: "Instead of imagining a gross exchange of the whole bundles of goods supplied and demanded by the market participants under current prices, the picture is rather that of a flow of monetary streams passing through various markets in the opposite direction to the flows of goods. While the ultimate result of the exchange might be the same, the income theory of money is always interested in how it was achieved monetarily, what the actual monetary flows that facilitated the trade were...."

econoblog 101
Reading Mensik’s “The Origins of the Income Theory of Money”
Dirk Ehnts | Berlin School for Economics and 101

sfc-models.net — New papers using the SFC approach

Like it says, a list of papers and links.

sfc-models.net
New papers using the SFC approach

Posted by Gennaro Zezza