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Empirical models of the UK economy

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Time: 4.00pm - 6.00pm
Venue: Room 4006, John Galsworthy building, Penrhyn Road campus, Penrhyn Road, Kingston upon Thames, Surrey KT1 2EE
Price: free

Empirical models of the UK economy

Please join us for this event as part of the Economic Department Research Seminar Series.


Ken Coutts and Graham Gudgin will deliver a paper entitled 'An Empirical Keynesian Stock-Flow Consistent Model of the UK Economy with application to the post-referendum economy'.

This presentation outlines a new forecasting and simulation model developed at the Centre For Business Research in the University of Cambridge. The model is econometric with its 96 estimated equations fully dependent on UK data over recent decades. The model is Keynesian in the sense that it is demand-driven with none of the supply-side enveloping which convert the OBR and similar models into assumption-driven scenario systems. It is stock-flow consistent in that consumption depends on finance for spending, including borrowing and accumulated financial wealth, while the latter depends on saving and capital gains. The main exogenous drivers of the model are world trade, real government spending and mortgage credit. An important feature is that mortgage credit follows financial super-cycles with the UK now embarking on its fourth cycle since WW2. The model is used to compare pre-referendum forecasts with post-referendum scenarios.

Antoine Godin will deliver a paper entitled 'A dynamic model of financial balances for the United Kingdom'.

The paper constructs a new scenario analysis model for the United Kingdom using ONS data from 1987 to the present. The model links decisions about real variables to credit creation in the financial sector and decisions about asset allocation among investors for a wide array of financial assets. The model is developed, estimated and calibrated from first principles as well as describing the stock-flow coherent database constructed to validate the model. Several scenarios are imposed on the model to test its usefulness as a medium term scenario analysis tool, including increases in banks' capital ratios, sudden stops, changes in investment, increases in house prices and fiscal expansions.


Ken Coutts is Emeritus Assistant Director of Studies in the Faculty of Economics, University of Cambridge, and Life Fellow in Economics, Selwyn College, Cambridge. A member of the Cambridge Economic Policy Group in his younger career, led by Wynne Godley, his main interests are in macroeconomics, monetary and fiscal policy, trade, capital flows and balance of payments. He has published widely in these areas. He has also written extensively on the pricing behaviour of manufacturing industries in the UK and Australia.

Graham Gudgin is currently Honorary Research Associate at the Centre For Business Research (CBR) in the Judge Business School at the University of Cambridge. He is also visiting Professor at the University of Ulster and Chairman of the Advisory Board of the Ulster University Economic Policy Centre. He was director of the Northern Ireland Economic Research Centre from 1985 to 1998 when he became Special Adviser to the First Minister in the NI Assembly until 2002. Prior to this he was a member of the Cambridge Economic Policy Group (CEPG) under the late Wynne Godley. He is the author of a large number of books, reports and journal articles on regional economic growth in the UK and on the growth of small firms. He is currently working with ken Coutts on UK macro-economic policy issues.

Antoine Godin is an Associate Professor of Economics at Kingston University. He holds a M.Sc. in applied mathematics engineering and a Ph.D. in economics. He has developed two modelling software: a R package to design, calibrate and simulate Stock-Flow Consistent models (, and a java platform to design and simulate Agent-Based Stock-Flow Consistent models ( Antoine has published numerous articles both on methodological and theoretical aspects, combining various strands of literature, and applied to diverse topics such as environmental, labour or innovation economics.

Booking is essential to attend this event.

For further information about this event:

Contact: Antoine Godin


Directions to Room 4006, John Galsworthy building, Penrhyn Road campus, Penrhyn Road, Kingston upon Thames, Surrey KT1 2EE: