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Directed Technological Change in a Post-Keynesian Ecological Macromodel

Syed Ali Asjad Naqvi () and Engelbert Stockhammer ()

Ecological Economics, 2018, vol. 154, issue C, 168-188

Abstract: This paper presents a post-Keynesian ecological macromodel, which is stock-flow consistent, and incorporates directed technological change. Private and public R&D spending across three competing, yet complementary inputs – Labor, Capital, and Resources – follow a portfolio allocation decision, where inputs with relatively higher growth in costs, see higher R&D investment and productivity gains. Two policy experiments are reported; a market-based Resource tax increase, and a centralized green policy, where public R&D budget is shifted towards Resource-saving technologies. We highlight that in the presence of labor market institutions, which give rise to hysteresis, and limited R&D budgets, a policy of continuous Resource tax growth is needed to induce Resource-saving technological change to achieve a greener economy. This needs to be coupled with planned government spending adjustment to spur demand and boost investment. The findings also suggest that a mix of market-based and centralized policies may be optimal.

Keywords: Directed technological change; Research and development; Post-Keynesian economics; Stock-flow consistent model; Environmental policies (search for similar items in EconPapers)
Date: 2018
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Working Paper: Directed technological change in a post-Keynesian ecological macromodel (2017) Downloads
Working Paper: Directed Technological Change in a post-Keynesian Ecological Macromodel (2017) Downloads
Working Paper: Directed Technological Change in a post-Keynesian Ecological Macromodel (2017) Downloads
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