Macro constraints and micro expectations: Heterogeneous entrepreneurs in a stock-flow consistent model

Arguably, stock-flow consistent (SFC) modeling may be seen as the Post-Keynesian equivalent of mainstream’s dynamic stochastic general equilibrium (DSGE) modeling. For the time being, in these models animal spirits (i.e. entrepreneurs’ instincts or gut feelings) do not really play a role, nor are the investment expectations derived from actual field studies. And yet, there are many ways to predict future outcomes: animal spirits have to differ from one another so as to make profits. Thus, the contribution of this paper is threefold: 1) develop a SFC model with heterogeneous animal spirits (i.e. different ways to expect when it comes to investment), 2) based on a field study; 3) which shows that, despite the fact that macro causalities end up constraining the heterogeneous individual decisions, this heterogeneity enhances the resilience of the economy as a whole.