Understanding Ireland's Economic Crisis via Stock-Flow Consistent Macroeconomic Models

No model helped predict or understand why Ireland’s economy has collapsed so spectacularly since 2007. This is because the real and financial sides of the economy aren’t modeled using current tools. Using INET funds, we will build a stock flow consistent model for Ireland to solve this practical problem, as well as a theoretical problem in the estimation of large stock flow consistent models highlighted in the literature. The project is important because previous modeling methods have largely failed, and because small open economies in an era of globalization all over the world face the same challenges as Ireland.