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Institutional change and ecological structural change

Author

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  • Grazini, Chiara
  • Guarini, Giulio
  • Porcile, Jose Gabriel

Abstract

The paper presents a model discussing the political economy dimension of the green transition. There are brown sectors whose share in value-added and employment should contract and green sectors whose share should increase. Green technological changes require more skilled workers, potentially exacerbating inequalities between them and unskilled workers. Trade unions advocate for a “Just Transition”, ensuring income protection and creating new “green jobs”. However, the green restructuring of the economy demands highly subsidized investments in the short run. A political economy problem arises: how to regulate brown capitalists, support green capitalists, and prevent unskilled workers from joining forces with brown capitalists to block the green transition. The solution can be positive feedback between green technical change, non-price competitiveness, and employment. The BOPCG model allows for highlighting the role of catching up in green technologies in non-price competitiveness and endogenous institutional change to give rise to a growth path consistent with the idea of a “just green transition”.

Suggested Citation

  • Grazini, Chiara & Guarini, Giulio & Porcile, Jose Gabriel, 2024. "Institutional change and ecological structural change," Structural Change and Economic Dynamics, Elsevier, vol. 71(C), pages 354-368.
    • Handle: RePEc:eee:streco:v:71:y:2024:i:c:p:354-368
    DOI: 10.1016/j.strueco.2024.08.004
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    More about this item

    Keywords

    Green technology gap; Institutional change; Post-Keynesian model; Green job;
    All these keywords.

    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

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