Abstract
According to Lavoie and Reissl, stock-flow consistent (SFC) modeling with “fully specified” financial sector allows for a better understanding of the dynamics of monetary economies than less detailed models. Although detailed models can help to identify mechanisms that cannot be captured by simpler models, they also have limitations that are worth bearing in mind when it comes to assess the merits of both kinds of modeling. This note pinpoints some difficulties regarding the conceptual framework and formal treatment of the “fully specified” SFC model, leading to a more balanced assessment regarding economic models.
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