Published as part of Macroeconomic Modelling, Economic Policy and Methodology, book published by Routledge, edited by Bryalsen, Raza and Olessen, 2022
Reyes and Mazier present a first version of an econometric stock flow consistent (SFC) model of the French economy – an aggregate model with a single product, five domestic agents and the rest of the world with a complete representation of real and financial sectors in stocks and flows. The structure of the model is close to that of existing SFC models with demand-led dynamics, a Kaleckian accumulation behavior and an indebtedness norm. The dynamic simulations on the past over the period 1996–2019 provide acceptable results. The basic variants display the usual multiplier effects and a dominant profit led logic. The dynamics of the housing sector and the land price boom seem to work at the expense of firms’ productive investment. Finally, the effects of unconventional monetary policy are evaluated: distribution of helicopter money in favor of the government to finance additional public investment or social transfers, partial cancellation of the public debt held by the central bank.
