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A stock-flow-fund ecological macroeconomic model

Dafermos, Yannis; Nikolaidi, Maria; Galanis, Giorgos

A stock-flow-fund ecological macroeconomic model Thumbnail


Yannis Dafermos

Maria Nikolaidi

Giorgos Galanis


© 2016 The Authors This paper develops a stock-flow-fund ecological macroeconomic model that combines the stock-flow consistent approach of Godley and Lavoie with the flow-fund model of Georgescu-Roegen. The model has the following key features. First, monetary and physical stocks and flows are explicitly formalised taking into account the accounting principles and the laws of thermodynamics. Second, Georgescu-Roegen's distinction between stock-flow and fund-service resources is adopted. Third, output is demand-determined but supply constraints might arise either due to environmental damages or due to the exhaustion of natural resources. Fourth, climate change influences directly the components of aggregate demand. Fifth, finance affects macroeconomic activity and the materialisation of investment plans that determine ecological efficiency. The model is calibrated using global data. Simulations are conducted to investigate the trajectories of key environmental, macroeconomic and financial variables under (i) different assumptions about the sensitivity of economic activity to the leverage ratio of firms and (ii) different types of green finance policies.


Dafermos, Y., Nikolaidi, M., & Galanis, G. (2017). A stock-flow-fund ecological macroeconomic model. Ecological Economics, 131, 191-207.

Journal Article Type Article
Acceptance Date Aug 12, 2016
Online Publication Date Sep 14, 2016
Publication Date Jan 1, 2017
Deposit Date Sep 6, 2016
Publicly Available Date Sep 14, 2016
Journal Ecological Economics
Print ISSN 0921-8009
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 131
Pages 191-207
Keywords ecological macroeconomics, stock-flow consistent modelling, laws of thermodynamics, climate change, finance
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