I have a problem with Inv. I use a derivation of Keen's Minsky model to assess the changes in the US economy. In a sense the calculation of Inv has always been a problem, but in the past, I've always been able to have a workaround, and thus keep the model simple.
The 2020Q2 happened and a $2Tn US budget deficit, and a 30% drop in US GDP. I'm talking principle here, not precision, so don't take these figures as factual. A calculation of PIr then gives a value of 0.73 and present calculation of Inv from PIr gives a value of 3.8 E+13. That's a problem.
I'm going to propose a solution in the form of Kalecki's Profit Equation.
Kalecki profit = investment + export surplus + Deficit + capital consumed – savings
We have already calculated Private Sector Profit PIr and can calculate Inv
Inv = -export surplus - Deficit - capital consumed + savings + PIr
As someone said, talk's cheap, show me the code. I'm not there yet. Modifying the model in this way increases the instability, so it's time for a rethink, time to post the method, and to ask if anyone can see any obvious errors.
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I have a problem with Inv. I use a derivation of Keen's Minsky model to assess the changes in the US economy. In a sense the calculation of Inv has always been a problem, but in the past, I've always been able to have a workaround, and thus keep the model simple.
The 2020Q2 happened and a $2Tn US budget deficit, and a 30% drop in US GDP. I'm talking principle here, not precision, so don't take these figures as factual. A calculation of PIr then gives a value of 0.73 and present calculation of Inv from PIr gives a value of 3.8 E+13. That's a problem.
I'm going to propose a solution in the form of Kalecki's Profit Equation.
Kalecki profit = investment + export surplus + Deficit + capital consumed – savings
We have already calculated Private Sector Profit PIr and can calculate Inv
Inv = -export surplus - Deficit - capital consumed + savings + PIr
As someone said, talk's cheap, show me the code. I'm not there yet. Modifying the model in this way increases the instability, so it's time for a rethink, time to post the method, and to ask if anyone can see any obvious errors.