Construction of a Stock-Flow Consistent Macroeconometric Model for Japan
Prof. Park, Seung-Joon
Kwansei Gakuin University
School of Policy Studies
December 1, 2025Â
　This paper attempts to construct an empirical stock-flow consistent (SFC) macroeconometric model using actual Japanese economic data. It documents the process and outcomes from dataset creation, model construction, to the initial policy simulation run. Referencing the Danish SFC model by Byrialsen et al. (2020), we prototyped a Japanese version with a similar structure of economic model, with more detailed Flow-of-Funds model. We found that most of the dataset could be created using figures from the "National Accounts of Japan (GDP Statistics for 2023)", and the model was constructed using user-friendly PC softwares. This version has seven financial asset categories, divides the financial sector into two departments (the Bank of Japan and other financial institutions), and enables the observation of changes in money supply and monetary base due to fiscal and monetary policy.
