Zezza, Genna o; Valdecan os, Sebas ian
A icle
Empi ical s ock- low consis en models: Edi o ial o he
special issue
Eu opean Jou nal o Economics and Economic Policies: In e en ion (EJEEP)
P o ided in Coope a ion wi h:
Edwa d Elga Publishing
Sugges ed Ci a ion: Zezza, Genna o; Valdecan os, Sebas ian (2025) : Empi ical s ock- low consis en
models: Edi o ial o he special issue, Eu opean Jou nal o Economics and Economic Policies:
In e en ion (EJEEP), ISSN 2052-7772, Edwa d Elga Publishing, Chel enham, Vol. 22, Iss. 3, pp.
298-300,
h ps://doi.o g/10.4337/ejeep.2025.03.02
This Ve sion is a ailable a :
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Eu opean Jou nal o Economics and Economic Policies: In e en ion, Vol. 22 No. 3, 2025, pp. 298–300
Jou nal compila ion © 2025 Edwa d Elga Publishing L d
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Edi o ial
This is an open access wo k
G ow h models, g ow h s a egies, and powe
blocs in Tu key and Egyp in he wen y- i s
cen u y
Ali Rıza Güngen
Social Sciences, Columbia College, Canada
Ümi Akçay
Ins i u e o In e na ional Poli ical Economy, Be lin School o Economics and Law, Be lin, Ge many
Uemi .Akcay@hw -be lin.de
Analysis o he g ow h pa e ns in he Global Sou h in he wen y- i s cen u y sugges s he e is oom
o au ho i a ian s a es o sea ch o new g ow h models. Au ho i a ian s a es, such as Tu key and
Egyp , bene i ed om global inancial ci cums ances in he ea ly 2000s and expe ienced shi s in
g ow h s a egies in he 2010s, supp essing poli ical space u he . Ou main esea ch ques ion,
hus, is ocusing on wha he main domes ic poli ical economy causes o hese g ow h s a egy and
model changes a e. To explain he changes in g ow h s a egies and models amid he s eng h o ein-
o ced au ho i a ian egimes in hese wo coun ies, we employ a hyb id esea ch s a egy, ying
g ow h model changes o con lic s wi hin he powe bloc. We a gue ha in he mid- o-la e
2010s, pe iphe al goods p oduce s gained he uppe hand in Tu key, while a mili a y akeo e in
Egyp was ollowed by he p omo ion o expo s and new in es men s. We also con end ha powe
bloc econ igu a ions in he las decade and he ise o new g ow h s a egies bo h in Tu key and in
Egyp aimed o change p e ious domes ic demand-led demand and g ow h models.
Keywo ds: compa a i e poli ical economy, g ow h models, g ow h s a egies, Tu key, Egyp
JEL codes: B52, E65, E66, F43, O43, P52
1 INTRODUCTION
Au ho i a ian s a es in Tu key and Egyp eju ena ed hemsel es in he 2010s. This was a
de elopmen con a y o he widesp ead expec a ion ha when aced wi h deep economic
c ises and b ewing social discon en , au ho i a ian egimes a e less likely o main ain hei
powe . This s udy elabo a es on he g ow h models o Tu key and Egyp in he wen y-
i s cen u y. Despi e signi ican di e ences ega ding expo capaci y and mac oeconomic
indica o s, poli ical economic de elopmen s con e ge in a ious aspec s in hese wo coun-
ies. Mo eo e , he au ho i a ian egimes in bo h Tu key and Egyp main ained hei
powe while inc easingly supp essing he poli ical space in he 2010s (Tuğal 2016). We
desc ibe au ho i a ianism as a se o p ac ices ha isola es key policy-making p ocesses
om democ a ic o e sigh and excludes la ge g oups such as wo king classes, e hnic mino-
i ies o subal e n g oups om ins i u ional poli ics (Salgado 2022). F om a c i ical poli-
ical economy pe spec i e, au ho i a ian p ac ices canno be concei ed as clea ly cu om
Resea ch A icle
This isan open access wo k
Recei ed 8 Decembe 2022, accep ed 7 No embe 2023
Eu opean Jou nal o Economics and Economic Policies: In e en ion, Vol. 21 No. 1, 2024, pp. 151–171
Fi s published online: Ap il 2024; doi: 10.4337/ejeep.2024.01.09
Jou nal compila ion © 2024 Edwa d Elga Publishing L d
© 2024 The Au ho
Empi ical s ock- low consis en models
Edi o ial o he special issue
Genna o Zezza*
Uni e si y o Cassino, I aly and Le y Economics Ins i u e, USA
Sebas ian Valdecan os**
Aalbo g Uni e si y, Denma k
This Special Issue is a collec ion o some con ibu ions p esen ed o he i s wo kshop
on empi ical s ock- low consis en (SFC) models, o ganized a he Aalbo g Uni e si y,
Denma k, in Sep embe 2023.
In he pas 25 yea s o so, s ock- low consis en models ha e been adop ed by a g ow-
ing numbe o new esea ch con ibu ions o mac oeconomics, which do no ely on
mic o- ounda ions and he gene al equilib ium app oach. The eason o he success o
his app oach s ems om he e ec i eness in dealing in an app op ia e way wi h he in e-
g a ed analysis o eal and inancial ma ke s. In addi ion, he lexibili y o he app oach
makes i an excellen candida e o he de elopmen o models ha go beyond he econ-
omy o analyze he in e ac ions wi h he en i onmen , he use o exhaus ible esou ces,
e c.
The in e es ed eade is e e ed o he mos in luen ial con ibu ion o he SFC
app oach in Godley and La oie (2007) and o he ollowing su eys: Ca e zasi and Godin
(2015), Niki o os and Zezza (2017) and Ca ne ali e al. (2019).
The pu pose o he 2023 Aalbo g wo kshop was o connec indi iduals and esea ch
g oups who ocused mo e speci ically on SFC models es ima ed o calib a ed o da a o
whole coun ies, a he han on simple heo e ical models.
The con ibu ion by Ch is os Pie os p o ides a use ul su ey o empi ical SFC models
o whole coun ies. The au ho p oposes a axonomy, sugges ing ha hese models ha e
de eloped om (a) New Camb idge1 3-sec o models conside ing he p i a e sec o as
a whole, along wi h he go e nmen and he o eign sec o (NC models); (b) Godley–
La oie ype models, based on he seminal wo k o Godley and La oie (2007), whe e he
p i a e sec o is spli in o Households, Non- inancial businesses and one o mo e ypes
o inancial ins i u ions (GL models); and (c) models wi h a High deg ee o Complexi y,
which ha e appea ed mo e ecen ly (HC models).
A comp ehensi e lis o con ibu ions in he h ee g oups is p esen ed and discussed,
s essing ha models in he las ca ego y a y subs an ially acco ding o he main esea ch
ques ion hey aim o add ess.
1 . This label is associa ed wi h he wo k o F ancis C ipps, Wynne Godley and hei associa es in
Camb idge (UK) in he 1970s–1980s. See C ipps and Godley (1976) amongs o he s.
* Co esponding au ho – Email: [email p o ec ed].
** Email: [email p o ec ed].
Edi o ial o he special issue 299
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Acco ding o Pie os, a highe deg ee o complexi y, howe e , comes a he cos o a
wo se goodness o i agains ac ual da a, mainly o he ola ili y o inancial ma ke s. The
au ho concludes wi h sugges ions on how o imp o e such models wi h a be e speci ica-
ion o he p oduc i e s uc u e and bo h inancial and labo ma ke s.
The pape by Huub Meije s and Joan Muysken, ‘Theo y and measu emen in SFC mod-
els: he ole o he inancial sec o ’, e e s o an SFC model o he Du ch economy de el-
oped by he au ho s2 o illus a e all da a collec ion and manipula ion p oblems ha a ise
in he cons uc ion and calib a ion o an SFC model o a whole coun y. Thei model
alls in o Pie os’ HC ca ego y, wi h a de ailed discussion on ins i u ions o en igno ed
in o he SFC models, such as Pension Funds. They also poin ou well-known p oblems
wi h e i ying he consis ency o published da a, namely he econcilia ion o low da a
coming om na ional accoun s o inancial da a in he low o unds and balance shee s.
The au ho s desc ibe how such p oblems can be o e come wi h app op ia e assump ions.
The o he pape s e e o SFC models o speci ic coun ies.
The con ibu ion by Lau en joye and colleagues om Aalbo g Uni e si y, ‘Flexibili y in
design: he mul iple applica ions o a medium-sized empi ical model o Denma k’, shows
he bene i s o choosing a model s uc u e ha is nei he oo simple no oo complex, p o-
iding he lexibili y needed o add ess di e en esea ch ques ions ela i e o he coun y
unde s udy.
The model o Denma k is used o add ess di e en opics: (1) de e mining whe he
he Danish economy is wage led o p o i led, showing complex ela ionship be ween
demand, income dis ibu ion and g ow h, which do no imply a clea ca ego iza ion, hus
allowing o possible swi ches be ween he wo egimes; (2) discussing he e ec i eness o
mone a y policy o add ess in la iona y p essu es in he pos -COVID phase, wi h esul s
showing ha coo dina ion be ween iscal and mone a y policy would be mo e e ec i e in
educing in la ion, whils ha ing less pe e se e ec s on eal GDP g ow h; (3) s udying
he de e minan s o he g owing cu en accoun su plus o Denma k a e 2010; and (4)
analyzing he po en ial impac o a educ ion in unemploymen bene i s.
Chong, Mazie and Reyes, ‘Mac oeconomic policy e alua ion in an SFC econome ic
model: he case o he in es men p og amme o clima e ac ion in F ance’, p esen s an
analysis o he in es men p og am o clima e ac ion in F ance, using an SFC model buil
ollowing p e ious wo k by some o he same au ho s, modi ied o handle he speci ici ies
o he p oposed low-ca bon ansi ion in he coun y.
Model simula ion shows ha he impac o he p oposed p og am has a much lowe
ad e se e ec on public inances wi h espec o o he es ima es, bu a wo se e ec on he
balance o paymen s. The model SFC s uc u e allows o discuss sou ces o unds, as well
as implica ions o weal h/deb accumula ion o he di e en ins i u ional sec o s.
F ancesco Zezza, ‘Fiscal and mone a y policy in an SFC model o he I alian economy’,
uses a ela i ely complex model o he I alian economy (Zezza/Zezza 2022) o e alua e he
e ec s o iscal and mone a y policy on he coun y. The pape also discusses he di e -
ences o he model agains o he s uc u al models o he I alian economy and p o ides
e idence o he abili y o he model o ack his o ical da a using dynamic simula ion.
Las , bu no leas , a special session in he wo kshop was dedica ed o esea ch om
younge schola s.
Da id An, ‘Modelling he g een ansi ion o he Chinese economy’, p esen s a sophis-
ica ed SFC model, which is expanded – wi h espec o o he SFC models – o discuss
he ole o he ene gy sec o and he impac o emissions. A e he model desc ip ion,
2 . See Meije s and Muysken (2022).
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he au ho discusses he esul s o al e na i e scena ios based on di e en ca bon p icing
policies.
The pape by Simon Fløj Thomsen, ‘The impac o en i onmen al egula ions on
compe i i eness and ca bon leakage’, e alua es wo al e na i e hypo heses: he ‘pollu ion
ha en’, which sugges s ha en i onmen al egula ions can posi i ely a ec coun y le el
compe i i eness h ough g een esea ch and de elopmen , agains he ‘Po e hypo he-
sis’, sugges ing ha egula ions imply highe p oduc ion cos s, wi h nega i e e ec s on
p oduc i i y.
The au ho de elops a wo-a ea SFC model, calib a ed o ma ch key a iables o he
Danish economy, o simula e he e ec s o he in oduc ion o en i onmen al egula ions,
inding ha he ad e se e ec s on p oduc i i y a e s onge in he sho un, bu posi i e
e ec s p e ail in he medium-long un, e en in a small open economy like Denma k.
O e all, he con ibu ions ga he ed in his Special Issue e lec he apid p og ess ha
empi ical s ock- low consis en modeling has made in ecen yea s. F om compa a i e
su eys o de ailed coun y s udies, and om he analysis o mac oeconomic s abiliza ion
policies o he challenges posed by clima e change and he g een ansi ion, he pape s
illus a e he ichness and lexibili y o he SFC app oach. They also highligh he ongo-
ing me hodological challenges, pa icula ly ega ding da a consis ency and he ade-o
be ween model complexi y and empi ical i . By b inging oge he di e se applica ions
and pe spec i es, his collec ion p o ides bo h a s a e-o - he-a o e iew and a s imulus
o u he esea ch, s eng hening he ole o empi ical SFC models as a powe ul ool o
he s udy o con empo a y mac oeconomic issues.
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