Is It Possible to Visualise Any Stock Flow Consistent Model as a Directed Acyclic Graph?
Yes it is. We rigorously demonstrate the equivalence of any stock flow consistent (SFC) model to a directed acyclic graph (DAG) using condensation graphs. The equivalence between stock flow models and DAGs is useful both for visualising large-scale macroeconomic models of this type and for inferring causality within these models. We developed a new package to build and simulate any SFC model and generate the corresponding DAGs, and we provide an example of this package using a well known model from the literature.
KeywordsStock flow consistent models Directed graphs Macroeconomic modeling
JEL ClassificationE01 E12 E17
|Funder Name||Grant Number||Funding Note|
|Institute for New Economic Thinking (US)|