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Sustainability in a post-Keynesian growth model for an open economy

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  • Guarini, Giulio
  • Porcile, Gabriel

Abstract

The paper expands the BOP-constraint growth model and Kaldorian regimes (productivity and demand regimes) in order to include some of the concerns raised by ecological economics in post-Keynesian models for open economies. The demand regime is modified by taking into account Porter's hypothesis, which suggests that environmental innovations, spurred by environmental policies, can foster competitiveness. As a result, the equilibrium BOP-constrained rate of growth increases, leading to a different version of Thirlwall's Law, which opens room for analyzing the impact of environmental innovations on convergence between developing and developed economies. The productivity regime in turn considers the growth and employment implications of innovations in labor productivity (standard innovations) and environmental efficiency (environmental innovations). It is argued that the fiscal policy and composition of public expenditure matter for long run growth, employment and sustainability.

Suggested Citation

  • Guarini, Giulio & Porcile, Gabriel, 2016. "Sustainability in a post-Keynesian growth model for an open economy," Ecological Economics, Elsevier, vol. 126(C), pages 14-22.
  • Handle: RePEc:eee:ecolec:v:126:y:2016:i:c:p:14-22
    DOI: 10.1016/j.ecolecon.2016.03.005
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    Cited by:

    1. repec:gei:jnlfer:v:2:y:2017:i:1:p:1-15 is not listed on IDEAS
    2. Marwil J. Dávila-Fernández, 2018. "Alternative Approaches to Technological Change when Growth is BoPC," Department of Economics University of Siena 795, Department of Economics, University of Siena.
    3. repec:gam:jecomi:v:6:y:2018:i:1:p:3-:d:126197 is not listed on IDEAS
    4. repec:spr:soinre:v:141:y:2019:i:2:d:10.1007_s11205-018-1840-4 is not listed on IDEAS
    5. Marwil J. Dávila-Fernández & Serena Sordi, 2018. "Attitudes Toward Climate Policies in a Macrodynamic Model of the Economy," Department of Economics University of Siena 784, Department of Economics, University of Siena.

    More about this item

    Keywords

    Sustainability; Open economy; Post-Keynesian economics; Environmental innovation;

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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