Rezai, Armon and Taylor, Lance and Mechler, Reinhard
Ecological Macroeconomics: An application to climate change.
SRE - Discussion Papers, 2012/06.
WU Vienna University of Economics and Business, Vienna.
Ecological Economics has not paid sufficient attention to the
macroeconomic level both in terms of theory and modelling. Yet, key
topics debated in the field of Ecological Economics such as sustainable
consumption, reduction in working time, the degrowth debate, the
energy-exergy link, and the rebound effect require a wholistic and
macro perspective. While this deficiency has been identified before and
Keynesian economics has been generally suggested as a potent vehicle
to establish economic system's thinking, very little concrete theorizing
and practical suggestions have been put forward. We give further
credence to this suggestion and demonstrate the value of tackling key
concerns of Ecological Economics within a Keynesian growth
framework. Contextualized by an application to climate change we
suggest that policy relevant recommendations need to be based on a
consistent view of the macroeconomy. We end with laying out key
building blocks for a Keynesian model framework for an Ecological
Macroeconomics. (author's abstract)