A Stock-flow Consistent General Framework for Formal Minskyan Analyses of Closed Economies

This paper reviews the general tenets of "stock-flow consistent" and the "formal Minskyan" literatures and argues that the advantages and weaknesses of the latter become clearer when analyzed with the tools of the former. It also analyzes a small but representative and influential sample of seminal "formal Minskyan" models, particularly the Taylor-O’Connel model, in light of a fully consistent "Minskyan artificial economy." The paper also shows these models often assume oversimplified hypotheses (that don’t do justice to the richness of Minskyan analyses) and, more seriously, often ignore the logical implications of these hypotheses. Finally, the authors arugue that most of these problems can be tackled when "formal Minskyan" models are phrased as "closures" of the "general Minskyan" accounting framework described in the paper.