Themes in Modern Macroeconomics pp 140-179 | Cite as
A Simple Stock Flow Model of the Danish Economy
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Abstract
This study describes the simple model of the Danish economy which we used for a course on macroeconomics in Aalborg during the winter of 1987–8. Our model differed from the conventional textbook IS-LM model in that it included, right from the start, a representation of stock (or balance sheet) variables which were consistently interrelated with flow variables. The statistical embodiment of the theoretical model constituted a useful introduction to economic statistics and the functional relationships were studied as part of an introduction to econometrics. The model as a whole was then simulated to discover something about how a real life economy works.
Keywords
Interest Rate Capital Gain Interest Payment Nominal Exchange Rate Government DebtPreview
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