A fully fledged description of the Dystopian Schumpeter meeting Keynes (DSK) model – now fully stock-flow consistent (SFC) – is finally out!
This latest version of the DSK agent-based integrated assessment model is embedded in a comprehensive accounting framework, allowing for detailed tracking of balance sheet items and financial flows throughout simulations.
Why making the DSK model fully SFC is a game-changer?🌍📊
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Transparent and consistent financial tracking:
The SFC framework ensures all balance sheets and financial flows are explicitly monitored, enabling precise analysis of how different scenarios impact financial ratios and positions across agents and sectors. -
Improved model reliability:
By eliminating accounting inconsistencies, the SFC structure enhances the credibility of simulation outcomes and strengthens the robustness of model initialization and calibration. -
Foundation for future development:
The SFC design lays essential groundwork for upcoming extensions of the DSK model, supporting its evolution into an even more powerful tool for systemic climate-finance analysis.
The paper provides the most detailed description to date of any model in the “Keynes + Schumpeter” tradition, along with insights into calibration, validation, and illustrative policy scenarios.
If you’re interested in the use of agent-based models (ABMs) in macroeconomic analysis
climate-finance intersections, systemic risk, or heterodox economic modeling, this is a must-read.
#ClimateFinance #AgentBasedModeling #StockFlowConsistent #DSKmodel #Macroeconomics #Sustainability #EconomicModeling