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A quarterly empirical model for the Danish economy: a stock-flow consistent approach

In: Post-Keynesian Economics for the Future

Author

Listed:
  • Mikael Randrup Byrialsen
  • Hamid Raza
  • Sebastian Valdecantos

Abstract

In this chapter we present a new quarterly model for the Danish economy with a focus on the main assumptions underlying the model and the construction of the databank. The purpose of the model is to build a platform for analysing the interdependencies between the real and financial sides of the economy in Denmark while adopting a stock-flow consistent approach. The model is estimated on quarterly data using Danish data for the period 2005–2020. In the final part of the chapter the model is validated against the actual data in two different ways: firstly, by comparing the simulation results with the actual trajectories of the main macroeconomic variables, and secondly, by performing a standard shock to public spending and investigating how the model behaves. The model is able to reproduce the actual dynamics of the key variables of the Danish economy in a fairly accurate way, just like the simulations carried out so far also show that the model behaves in line with the underlying economic theory.

Suggested Citation

  • Mikael Randrup Byrialsen & Hamid Raza & Sebastian Valdecantos, 2024. "A quarterly empirical model for the Danish economy: a stock-flow consistent approach," Chapters, in: Jesper Jespersen & Finn Olesen & Mikael R. Byrialsen (ed.), Post-Keynesian Economics for the Future, chapter 6, pages 85-106, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:22103_6
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    File URL: https://www.elgaronline.com/doi/10.4337/9781035307517.00013
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    Keywords

    Economics and Finance;

    Statistics

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