Directed technological change in a post-Keynesian ecological macromodel

Asjad Naqvi () and Engelbert Stockhammer

No PKWP1714, Working Papers from Post Keynesian Economics Society (PKES)

Abstract: This paper presents a post-Keynesian ecological macro model that combines three strands of literature: the directed technological change mechanism developed in mainstream endogenous growth theory models, the ecological economic literature which highlights the role of green innovation and material flows, and the post-Keynesian school which provides a framework to deal with the demand side of the economy, financial flows, and inter- and intra-sectoral behavioral interactions. The model is stock-flow consistent and introduces research and development (R&D) as a component of GDP funded by private firm investment and public expenditure. The economy uses three complimentary inputs – Labor, Capital, and (non-renewable) Resources. Input productivities depend on R&D expenditures, which are determined by relative changes in their respective prices. Two policy experiments are tested; a Resource tax increase, and an increase in the share of public R&D on Resources. Model results show that policy instruments that are continually increased over a long-time horizon have better chances of achieving a "green" transition than one-off climate policy shocks to the system, that primarily have a short-run effect.

Keywords: directed technological change; research and development; green transition; ecological economics; post-Keynesian economics; stock-flow consistency (search for similar items in EconPapers)
JEL-codes: E12 O33 Q57 (search for similar items in EconPapers)
Pages: 40
Date: 2017-10
New Economics Papers: this item is included in nep-env, nep-ino, nep-mac and nep-pke
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Citations: View citations in EconPapers (1)

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https://www.postkeynesian.net/downloads/working-papers/PKWP1714.pdf First version, 2017 (application/pdf)

Related works:
Journal Article: Directed Technological Change in a Post-Keynesian Ecological Macromodel (2018)
Working Paper: Directed Technological Change in a post-Keynesian Ecological Macromodel (2017)
Working Paper: Directed Technological Change in a post-Keynesian Ecological Macromodel (2017)
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