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Food and Energy Inventory Management, Fiscal Policy and the Quest for Strategic Quantity Controls: A Stock-Flow Consistent Model
GUSTAVO PEREIRA SERRA & ETTORE GALLO
This paper presents a stock-flow consistent (SFC) model that investigates government intervention in the basic goods market (i.e. food and energy) aimed at strategically controlling prices. The model endogenizes inventory dynamics, allowing the fiscal authority to adjust stocks in response to shocks in basic goods production. The model is calibrated and simulated, showing that inventory management policies act as a stabilizer, reducing the inflation peak soon after the shock, but leading to slightly higher underlying inflation following it. Overall, government intervention has a positive effect on both real wages and profit levels, in line with the paradox of costs.
Volume :- No.17 (2023)
Issue No :- 1 (2023)
Pages :- 91-110