A Classical-Post Keynesian critique on neoclassical environmentally-adjusted multifactor productivity

Giulio Guarini ()

Brazilian Journal of Political Economy, 2023, vol. 43, issue 1, 67-77

Abstract: The aim of the article is to critically analyze Environmentally-AdjustedMultifactor Productivity (EAMP), by considering the Classical-Post-keynesian environmentalframework Ecological Macroeconomics, integrated with the Evolutionary EnvironmentalEconomics. The paper introduces EAMP as rooted in in neoclassical economics and derivedfrom Cobb-Douglas function with natural resources built by Solow (1974). I presenttheoretical critiques of EAMP’s neoclassical assumptions by developing perspectives fromheterodox Ecological Macroconomics literature. Finally, I discuss the shortcomings ofEAMP’s conceptual framework, making specific reference to the policy debate on PorterHypothesis. The article puts in evidence how the assumptions of constant returns to scale,perfect competition and perfect input substitutability seriously alter the meaning andpromise of sustainability policy. The analysis indicates that EAMP is a poor instrument to study complex issues regarding the promotion and effectiveness of green innovationsand should therefore be abandoned to face the great challenges regarding the process ofecological transformation. JEL Classification: B12; Q55; O13.

Keywords: Classical-Post-Keynesian economics; environmentally-adjusted multifactor productivity; eco-innovation (search for similar items in EconPapers)
Date: 2023
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