A stock-flow-fund ecological macroeconomic model

By Yannis Dafermos, M. Nikolaidi, G. Galanis. 2015

187 citations recorded by the source corpus.

This paper develops a stock-flow-fund ecological macroeconomic model that combines the stock-flow consistent approach of Godley and Lavoie with the flow-fund model of Georgescu-Roegen. The model has the following key features. First, monetary and physical stocks and flows are explicitly formalised taking into account the accounting principles and the laws of thermodynamics. Second, Georgescu-Roegen's distinction between stock-flow and fund-service resources is adopted. Third, output is demand-determined but supply constraints might arise either due to environmental damages or due to the exhaustion of natural resources. Fourth, climate change influences directly the components of aggregate demand. Fifth, finance affects macroeconomic activity and the materialisation of investment plans that determine ecological efficiency. The model is calibrated using global data. Simulations are conducted to investigate the trajectories of key environmental, macroeconomic and financial variables under (i) different assumptions about the sensitivity of economic activity to the leverage ratio of firms and (ii) different types of green finance policies.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/186a1a88ae5544043637ed9adf3dcd2befae0da1

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Citations in the corpus

How can green differentiated capital requirements affect climate risks? A dynamic macrofinancial analysis (2020, unknown): “For some additional sensitivity analyses of previous versions of this model, see Dafermos et al. (2017) and Dafermos et al. (2018). 29 Note that l1 = 1 is a quite conservative value compared to the one that can be derived implicitly by the estimations in Mayordomo and Rodŕıguez-Moreno (2018).”
The impact of phasing out fossil fuel subsidies on the low-carbon transition (2019, background): “The focus on the behavioral and financial aspects of energy policies represents a novelty in the Post-Keynesian tradition on which the model is grounded (Caverzasi and Godin, 2014; Dafermos et al., 2017; Bovari et al., 2018; Ponta et al., 2018).”
Climate Change, Financial Stability and Monetary Policy (2018, unknown): “Note that in Dafermos et al. (2017) the formulation of the links between green capital and ecological efficiency indicators is quite different since it does not rely on logistic functions.”
Modelling innovation and the macroeconomics of low-carbon transitions: theory, perspectives and practical use (2019, unknown): “, 2016), DEFINE (Dafermos et al., 2017), EIRIN (Monasterolo & Raberto, 2018) (5)IMAGE-TIMER (Bouwman et al.”
Faraway, So Close: Coupled Climate and Economic Dynamics in an Agent-based Integrated Assessment Model (2018, background): “7Some interesting attempts at providing mixed system dynamics and agent based frameworks (Monasterolo and Raberto, 2016), as well as stock- ow consistent macro simulation models (Dafermos et al., 2017) are appearing.”
Ecological Macroeconomic Models: Assessing Current Developments (2017, methodology): “For example, analytical models can be used for simulations (e.g. D'Alessandro et al., 2010) while simple stock-flow consistent models can be solved by analytical methods (e.g. Berg et al., 2015).”