IDEAS home Printed from https://ideas.repec.org/p/lev/wrkpap/wp_1031.html

A Stock-Flow Ecological Model from a Latin American Perspective

Author

Listed:
  • Lorenzo Nalin
  • Giuliano Toshiro Yajima
  • Leonardo Rojas Rodriguez
  • Esteban Perez-Caldentey
  • Jose Eduardo Alatorre

Abstract

This study aims to develop an ecological stock-flow consistent (SFC) model based on the Latin American-stylized facts regarding economic, financial, and environmental features. We combine the macro-financial theoretical framework by Perez-Caldentey et al. (2021, 2023) and the ecological modeling of Carnevali et al. (2020) and Dafermos et al. (2018). We discuss two scenarios that test exogenous climate-related shocks. The first scenario presents the case in which international regulation on commodity trade becomes more stringent due to environmental concerns, thus worsening the balance-of-payment constraint of the region. The second scenario concerns the increase in frequency and intensity of adverse climate events in the region. Both scenarios show that the financial external constraint that determines the growth path of Latin American economies may be further exacerbated due to environmental-related issues.

Suggested Citation

  • Lorenzo Nalin & Giuliano Toshiro Yajima & Leonardo Rojas Rodriguez & Esteban Perez-Caldentey & Jose Eduardo Alatorre, 2023. "A Stock-Flow Ecological Model from a Latin American Perspective," Economics Working Paper Archive wp_1031, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_1031
    as

    Download full text from publisher

    File URL: https://www.levyinstitute.org/wp-content/uploads/2024/02/wp_1031.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Juan Carlos Moreno-Brid & Lorenzo Nalin & Edgar Pérez-Medina, 2022. "External challenges to the economic expansion of emerging markets in the post-COVID 19 and post-COP26 era: A balance-of-payments constrained growth (BPCG) perspective," PSL Quarterly Review, Economia civile, vol. 75(303), pages 313-354.
    2. Anne Löscher & Annina Kaltenbrunner, 2023. "Climate change and macroeconomic policy space in developing and emerging economies," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 46(1), pages 113-141, January.
    3. Gernot Wagner & Martin L. Weitzman, 2016. "Climate Shock: The Economic Consequences of a Hotter Planet," Economics Books, Princeton University Press, edition 2, number 10725.
    4. Alatorre, José Eduardo & Ferrer, Jimy & Galindo, Luis Miguel & Samaniego, Joseluis, 2014. "Procesos de adaptación al cambio climático: análisis de América Latina," Documentos de Proyectos 37613, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    5. Marc Lavoie & Gauthier Daigle, 2011. "A Behavioural Finance Model Of Exchange Rate Expectations Within A Stock‐Flow Consistent Framework," Metroeconomica, Wiley Blackwell, vol. 62(3), pages 434-458, July.
    6. Jens Hilscher & Yves Nosbusch, 2010. "Determinants of Sovereign Risk: Macroeconomic Fundamentals and the Pricing of Sovereign Debt," Review of Finance, European Finance Association, vol. 14(2), pages 235-262.
    7. Monasterolo, Irene & Raberto, Marco, 2018. "The EIRIN Flow-of-funds Behavioural Model of Green Fiscal Policies and Green Sovereign Bonds," Ecological Economics, Elsevier, vol. 144(C), pages 228-243.
    8. Dafermos, Yannis & Nikolaidi, Maria & Galanis, Giorgos, 2018. "Climate Change, Financial Stability and Monetary Policy," Ecological Economics, Elsevier, vol. 152(C), pages 219-234.
    9. Dunz, Nepomuk & Naqvi, Asjad & Monasterolo, Irene, 2021. "Climate sentiments, transition risk, and financial stability in a stock-flow consistent model," Journal of Financial Stability, Elsevier, vol. 54(C).
    10. Bovari, Emmanuel & Giraud, Gaël & Mc Isaac, Florent, 2018. "Coping With Collapse: A Stock-Flow Consistent Monetary Macrodynamics of Global Warming," Ecological Economics, Elsevier, vol. 147(C), pages 383-398.
    11. Esteban Pérez Caldentey & Nicole Favreau Negront & Luis Méndez Lobos, 2019. "Corporate debt in Latin America and its macroeconomic implications," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 42(3), pages 335-362, July.
    12. OECD & World Bank, 2019. "Fiscal Resilience to Natural Disasters," World Bank Publications - Books, The World Bank Group, number 32341, April.
    13. Lorenzo Nalin & Giuliano Toshiro Yajima, 2021. "Commodities fluctuations, cross border flows and financial innovation: A stock‐flow analysis," Metroeconomica, Wiley Blackwell, vol. 72(3), pages 539-579, July.
    14. Jean Boissinot & Doryane Huber & Gildas Lame, 2016. "Finance and climate: The transition to a low-carbon and climate-resilient economy from a financial sector perspective," OECD Journal: Financial Market Trends, OECD Publishing, vol. 2015(1), pages 7-23.
    15. Gaël Giraud & Florent MCISAAC & Emmanuel BOVARI, 2018. "Coping with the Collapse: A Stock-Flow Consistent Monetary Macrodynamics of Global Warming - Updated version dated July 2017," Working Paper 987f5d77-9601-4865-9ce1-4, Agence française de développement.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gourdel, Régis & Monasterolo, Irene & Dunz, Nepomuk & Mazzocchetti, Andrea & Parisi, Laura, 2024. "The double materiality of climate physical and transition risks in the euro area," Journal of Financial Stability, Elsevier, vol. 71(C).
    2. Carnevali, Emilio & Deleidi, Matteo & Pariboni, Riccardo & Veronese Passarella, Marco, 2021. "Cross-border financial flows and global warming in a two-area ecological SFC model," Socio-Economic Planning Sciences, Elsevier, vol. 75(C).
    3. Curcio, Domenico & Gianfrancesco, Igor & Vioto, Davide, 2023. "Climate change and financial systemic risk: Evidence from US banks and insurers," Journal of Financial Stability, Elsevier, vol. 66(C).
    4. Dunz, Nepomuk & Naqvi, Asjad & Monasterolo, Irene, 2021. "Climate sentiments, transition risk, and financial stability in a stock-flow consistent model," Journal of Financial Stability, Elsevier, vol. 54(C).
    5. Irene Monasterolo & Nepomuk Dunz & Andrea Mazzocchetti & Régis Gourdel, 2022. "Derisking the low-carbon transition: investors’ reaction to climate policies, decarbonization and distributive effects," Review of Evolutionary Political Economy, Springer, vol. 3(1), pages 31-71, April.
    6. Antoine GODIN & Paul HADJI-LAZARO, 2020. "Demand-induced transition risks: A systemic approach applied to South Africa," Working Paper b86d90ca-ea16-401e-9fac-4, Agence française de développement.
    7. Reissl, Severin & Fierro, Luca E. & Lamperti, Francesco & Roventini, Andrea, 2025. "The DSK stock-flow consistent agent-based integrated assessment model," Ecological Economics, Elsevier, vol. 236(C).
    8. Getaneh Mihret Ayele & Fentaw Leykun Fisseha, 2024. "Does climate change affect the financial stability of Sub-Saharan African countries?," Climatic Change, Springer, vol. 177(10), pages 1-22, October.
    9. Yannis Dafermos & Maria Nikolaidi, 2019. "Fiscal policy and ecological sustainability," FMM Working Paper 52-2019, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    10. D’Orazio, Paola & Popoyan, Lilit, 2019. "Fostering green investments and tackling climate-related financial risks: Which role for macroprudential policies?," Ecological Economics, Elsevier, vol. 160(C), pages 25-37.
    11. Dafermos, Yannis & Nikolaidi, Maria, 2021. "How can green differentiated capital requirements affect climate risks? A dynamic macrofinancial analysis," Journal of Financial Stability, Elsevier, vol. 54(C).
    12. Alessandro Moro, 2025. "Correction to: Optimal policies in a small open economy with an environmental externality and shallow foreign exchange markets," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 24(1), pages 51-51, January.
    13. Lagoarde-Ségot, Thomas & Revelli, Christophe, 2023. "Ecological money and finance. Introducing ecological risk-free assets," International Review of Financial Analysis, Elsevier, vol. 90(C).
    14. Jacques, Pierre & Delannoy, Louis & Andrieu, Baptiste & Yilmaz, Devrim & Jeanmart, Hervé & Godin, Antoine, 2023. "Assessing the economic consequences of an energy transition through a biophysical stock-flow consistent model," Ecological Economics, Elsevier, vol. 209(C).
    15. Dafermos, Yannis & Nikolaidi, Maria, 2019. "Fiscal policy and ecological sustainability: a post-Keynesian perspective," Greenwich Papers in Political Economy 37777, University of Greenwich, Greenwich Political Economy Research Centre.
    16. Alessandro Moro, 2021. "Can capital controls promote green investments in developing countries?," Temi di discussione (Economic working papers) 1348, Bank of Italy, Economic Research and International Relations Area.
    17. Dafermos, Yannis & Nikolaidi, Maria, 2022. "Assessing climate policies: an ecological stock–flow consistent perspective," Greenwich Papers in Political Economy 38039, University of Greenwich, Greenwich Political Economy Research Centre.
    18. Gourdel, Régis & Monasterolo, Irene & Gallagher, Kevin, 2025. "Climate transition spillovers and sovereign risk: Evidence from Indonesia," Energy Economics, Elsevier, vol. 143(C).
    19. Chen, Xinming & Fang, Tong, 2024. "Temperature anomalies and foreign direct investment: City-level evidence from China," International Review of Financial Analysis, Elsevier, vol. 91(C).
    20. Julia Anna Bingler & Chiara Colesanti Senni, 2020. "Taming the Green Swan: How to improve climate-related financial risk assessments," CER-ETH Economics working paper series 20/340, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lev:wrkpap:wp_1031. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lindsey Carter (email available below). General contact details of provider: https://www.levyinstitute.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.