Foreign debt, distribution, inflation and growth in a SFC model

PABLO GABRIEL BORTZ

Berlín

Conferencia; 16 Conference of Research Network Macroeconomics and Macroeconomic Policies (FMM); 2012

We present an open economy growth model, using the Stock-Flow Consistent (SFC) methodology. Our contribution is to add the possibility of one country issuing debt denominated in the other country?s currency, as well as allowing its firms to borrow from foreign banks. We investigate the effects and interactions that these features have on trade and financial flows, income distribution, foreign debt, fiscal and monetary policy, and try to draw some policy conclusions feasible for current economic problems such as the imbalances in the Eurozone.