This paper introduces heterogeneous microeconomic behavior into a demand-driven stock-flow consistent model with endogenous credit creation, so as to study the joint dynamics of both the personal and the functional distribution of income, household debt and aggregate demand. The distinctive...

This paper draws on a debate between Robert Skidelsky and Paul Krugman on the expansionary austerity hypothesis as a motivation to build a demand-driven agent-based model. The model features contagion across firms to explore whether fiscal consolidations may become expansionary due to a positive...