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Integrating Energy Use into Macroeconomic Stock-Flow Consistent Models

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  • Richters, Oliver

Abstract

This thesis conceptualizes a method to analyze the structural dependencies between the physics of energy use and the economy. By synthesizing stock-flow consistent models, input-output models, and aspects of ecological macroeconomics, a discrete dynamical model is developed to simultaneously study monetary flows through the financial system, flows of produced goods and services through the real economy, and flows of physical materials through the natural environment. First, the stability properties of the model are analyzed using bifurcation theory, delineating a generalized, multi-sectoral version of the Sraffian maximum rate of profit, and instabilities induced by inventory oscillations. Further analysis challenges claims that 0% interest rates are a necessary condition for a stationary economy. Second, one particular application of the model is illustrated by applying it to energy related problems such as rebound effects, and to assessing the contribution of energy price shocks to recessions caused by changes in Energy Returned on Energy Invested or price markup. Third, a minimal single-layer atmosphere climate model is used to demonstrate that the effect of anthropogenic heat flux from energy conversion on climate change should be taken into account in climate modeling once long-term growth scenarios are examined. In further research the model can contribute to an integrated assessment of pressing multidimensional problems such as climate change and the transformation to a sustainable economy, which equally relate to the economic, environmental and ecological sphere.

Suggested Citation

  • Richters, Oliver, 2015. "Integrating Energy Use into Macroeconomic Stock-Flow Consistent Models," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 154764, April.
  • Handle: RePEc:zbw:esthes:154764
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    More about this item

    Keywords

    ecological macroeconomics; energy economics; stock-flow consistent models; input–output analysis;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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