|The interest rate is raised at t=5, causing output to rise.|
This article will be unfortunately brief. I started working on an adding financial asset markets to my Python Stock-Flow Consistent (SFC) Model library, and I was ambushed by various bugs. (As various economists have remarked, it is a bad idea to mix up stocks and flows.) It looks like the code is working, but I still want to look over the results before making longer commentary. However, the code did reproduce one of the distinctive implications of SFC models: raising the rate of interest increases national production (in nominal terms, at least).