Abstract
Stock-flow consistent (SFC) models become complex and hence rather intractable once they seek to incorporate more features of reality. Solving such models numerically for preselected parameter values can help to overcome this problem. But how should the parameters be selected given that there often exists a host of economically plausible values? In order to address this problem, this paper suggests using a Monte Carlo approach to examine which combinations of parameters and starting values (feasibility regions) produce economically meaningful equilibria for the short and long run, and whether the long-term equilibria thus identified are in fact stable. In addition, we undertake a sensitivity analysis for all parameters which allows us to gauge the extent to which model results are driven by certain parameters and starting values.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: European Journal of Economics and Economic Policies: Intervention
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
