Volume of the steady-state space of financial flows in a monetary stock-flow-consistent model

Authored by Aurelien Hazan

Date Published: 2017

DOI: 10.1016/j.physa.2017.01.050

Sponsors: No sponsors listed

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Model Documentation: Other Narrative

Model Code URLs: Model code not found

Abstract

We show that a steady-state stock-flow consistent macro-economic model can be represented as a Constraint Satisfaction Problem (CSP). The set of solutions is a polytope, which volume depends on the constraints applied and reveals the potential fragility of the economic circuit, with no need to study the dynamics. Several methods to compute the volume are compared, inspired by operations research methods and the analysis of metabolic networks, both exact and approximate. We also introduce a random transaction matrix, and study the particular case of linear flows with respect to money stocks. (C) 2017 Elsevier B.V. All rights reserved.

Tags

Agent-based models finance Economics Physics and society Monte-carlo Needs Size Constraint satisfaction Random network Convex polytope Production networks Points