Volltext: Extension of the empirical stock-flow consistent (SFC) model for Austria (163)

44—Miess, Schmelzer/SFC Model Austria—IHS
4 Business As Usual (BAU) - Results
The business as usual scenario is the simplest forecast the model can produce. All parameters
and exogenous variables stay at their constant values as described in the previous section. The
result is a trajectory of the economy that depicts a future development if all things stay as
they were until now. The results for the most important endogenous variables are shown below.
Since the specification of all behavioural equations is still very crude and since prices are still
completely missing in the model, these results should be seen (at this stage) not as a realistic
forecast. However, they significantly reassure that the model is robust, since the results for all
variables, flows and stocks, display a steady projection of the trend of the recent past.
4.1 BAU-Results: Non-Financial Transactions
GDP and Net Lending/Net Borrowing are the main outcomes from the non-financial transactions.
Output GDPt is completely demand-driven by (gross) consumption incl. VAT, government
spending, investment, as well as the trade balance:
GDPt = Ct +Gt +
?
s
It,s + EXPt ? IMPt + Tva,t (20)
Figure 25 shows the Business as Usual (BAU) forecast for the Austrian GDP. The model and
the underlying dynamics we supposed for the parameters shown above seems to replicate past
dynamics fairly well. In the forecasting period 2015 - 2025, GDP growth seems to slow down -
our model version of “secular stagnation” (to be discussed.)
Figure 25: Austrian GDP - Past Data and Model BAU Forecast (in mln. Euro)
0
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GDP 
dum - dum - dum
finp/dir
FA
S
time
Sum of value
VAR
        

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