We study the interactions of banks and firms within a leverage cycle to understand how capacity utilization and capital investment interact with funding costs, leverage by banks and firms, and liquidity. We show in a simulation study that when firms can grow and die by becoming insolvent, and...

This paper uses an empirically grounded stock-flow consistent macroeconomic model to assess the impact of a sudden drop in government expenditures in the Irish economy. We are able to use the model to trace the development of the shock through the economy. We show that a sharp, one period...

The aim of this paper is to examine, using a four-country stock-flow consistent model, how global imbalances may persist or be resolved when a country such as China adopts an exchange rate regime relative to an anchor basket of currencies. We show that when China pegs its currency to a currency...

This paper builds and solves a stock flow consistent model in the tradition of Godley and Lavoie (2007). The goal of this paper is to develop a benchmark model that is both thorough and flexible enough to be applied to modern industrialized economies to aid monetary and fiscal policy decisions....

This paper presents a research framework for studying peer effects in the diffusion of innovations. The underlying mechanisms of peer effects are generally under-discussed in existing studies. By investigating diffusion processes in the real world and reviewing previous studies, we find that...