Sustainability in a post-Keynesian growth model for an open economy

Giulio Guarini () and Gabriel Porcile ()

Ecological Economics, 2016, vol. 126, issue C, 14-22

Abstract: The paper expands the BOP-constraint growth model and Kaldorian regimes (productivity and demand regimes) in order to include some of the concerns raised by ecological economics in post-Keynesian models for open economies. The demand regime is modified by taking into account Porter's hypothesis, which suggests that environmental innovations, spurred by environmental policies, can foster competitiveness. As a result, the equilibrium BOP-constrained rate of growth increases, leading to a different version of Thirlwall's Law, which opens room for analyzing the impact of environmental innovations on convergence between developing and developed economies. The productivity regime in turn considers the growth and employment implications of innovations in labor productivity (standard innovations) and environmental efficiency (environmental innovations). It is argued that the fiscal policy and composition of public expenditure matter for long run growth, employment and sustainability.

Keywords: Sustainability; Open economy; Post-Keynesian economics; Environmental innovation (search for similar items in EconPapers)
JEL-codes: E12 F43 Q55 Q56 Q57 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:126:y:2016:i:c:p:14-22

DOI: 10.1016/j.ecolecon.2016.03.005

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