beyond carbon pricing the role of banking and monetary policy in financing the transition to a low carbon economy it is widely acknowledged that introducing a price on carbon represents a crucial precondition for filling the current gap in low carbon investment however as this paper argues carbon pricing in itself may not be sufficient this is due to the existence of market failures in the process of creation and allocation of credit that may lead commercial banks the most important source of external finance for firms not to respond as expected to price signals under certain economic conditions banks would shy away from lending to low carbon activities even in the presence of a carbon price this possibility calls for the implementation of additional policies not based on prices in particular the paper discusses the potential role of monetary policies and macroprudential financial regulation modifying the incentives and constraints that banks face when deciding their lending strategy through for instance a differentiation of reserve requirements according to the destination of lending may fruitfully expand credit creation directed towards low carbon sectors this seems to be especially feasible in emerging economies where the central banking framework usually allows for a stronger public control on credit allocation and a wider range of monetary policy instruments than the sole interest rate

quantifying economic sustainability implications for free enterprise theory policy and practice article i nfo in a previous paper ulanowicz goerner lietaer and gomez 2009 we combined thermodynamic network and information theoretic measures with research on real life ecosystems to create a generalized quantitative measure of sustainability for any complex matter energy flow system the current paper explores how this metric and its related concepts can be used to provide a new narrative for long term economic health and sustainability based on a system s ability to maintain a crucial balance between two equally essential but complementary factors resilience and efficiency this generic explanation of the network structure needed to maintain long term robustness provides the missing theoretical explanation for what constitutes healthy development and the mathematical means to differentiate it quantitatively from mere growth matching long standing observations of sustainable vitality in natural ecosystems and living organisms the result is a much clearer more accurate understanding of the conditions needed for free enterprise networks to produce the kind of sustainable vitality everyone desires one which enhances and reliably maintains the health and well being of all levels of global civilization as well as the planet

facilitating the transition to a steady state economy some macroeconomic fundamentals abstract central government policy is based on a misguided understanding of the macroeconomics of a modern fiat currency economy as the owner issuer of a nation s currency a central government has unlimited spending power moreover taxation exists as nothing more than a means by which a central government can destroy the spending power of the private sector in the process of outlining some of the policies required to facilitate the transition to a steady state economy this paper does not recommend that central governments should spend wildly and irresponsibly to the contrary this paper explains how a central government can use its unique spending and taxation powers in a disciplined and policy effective manner yet in a manner that is being largely overlooked

institutions and environmental governance a reconceptualization abstract this article presents the conceptual revisions needed to extend the new institutional approach to environmental governance from its current local and international domains of application to all governance solutions including national environmental and natural resource use policies and multi level governance solutions that are increasingly used to address global environmental change the article suggests that environmental governance is best understood as the establishment reaffirmation or change of institutions to resolve conflicts over environmental resources it also explains why the choice of these institutions is a matter of social justice rather than of efficiency the article suggests a way to understand formal and state centered governance solutions as forms of collective ownership not unlike common property the article demonstrates how institutional analysis can gain resolution by looking at the functional and structural tiers organization of governance functions and formulation of key institutional rules as key aspects of the design of governance institutions

ecological macroeconomic models assessing current developments our society faces a dilemma while continued economic growth is ecologically unsustainable low or negative rates of economic growth are accompanied by adverse social impacts hence there is a need for macroeconomic tools that can help identify socially sustainable post growth pathways the emerging field of ecological macroeconomics aims to address this need and features a number of new macroeconomic modelling approaches this article provides 1 a review of modelling developments in ecological macroeconomics based on the literature and interviews with researchers and 2 an analysis of how the different models incorporate policy themes from the post growth literature twenty two ecological macroeconomic models were analysed and compared to eight policy themes it was found that environmental interactions and the monetary system were treated most comprehensively themes of income inequality work patterns indicators of well being and disaggregated production were addressed with less detail while alternative business models and cross scale interactions were hardly addressed overall the combination of input output analysis with stock flow consistent modelling was identified as a promising avenue for developing macroeconomic models for a post growth economy however due to the wide interpretation of what the economy entails future research will benefit from employing a range of approaches

climate change financial stability and monetary policy using a stock flow fund ecological macroeconomic model we analyse i the effects of climate change on financial stability and ii the financial and global warming implications of a green qe programme emphasis is placed on the impact of climate change damages on the price of financial assets and the financial position of firms and banks the model is estimated and calibrated using global data and simulations are conducted for the period 2015 2115 four key results arise first by destroying the capital of firms and reducing their profitability climate change is likely to gradually deteriorate the liquidity of firms leading to a higher rate of default that could harm both the financial and the non financial corporate sector second climate change damages can lead to a portfolio reallocation that can cause a gradual decline in the price of corporate bonds third financial instability might adversely affect credit expansion and the investment in green capital with adverse feedback effects on climate change fourth the implementation of a green qe programme can reduce climate induced financial instability and restrict global warming the effectiveness of this programme depends positively on the responsiveness of green investment to changes in bond yields

towards post keynesian ecological macroeconomics the paper starts with a brief criticism of macroeconomic analyses of different schools of thought for their focus on economic growth and maximisation of output this applies to the traditional keynesian approach which has focused on the achievement of sufficient aggregate demand to underpin full employment and full capacity utilisation down playing aggregate supply constraints this also applies to the neoclassical approach including the current new consensus macroeconomics approach which asserts the dominant role of aggregate supply in the long run and where growth is set by the so called natural rate of growth with no concerns over environmental and ecological issues the paper then proposes a different approach to macroeconomic analysis it explicitly acknowledges that economic growth is a double edged sword growth can help to alleviate persistent levels of high unemployment but it can also lead to potentially catastrophic environmental problems building on the monetary circuit theory and the demand led growth theory the paper offers an analysis of the interconnections and interdependence of the economic biophysical and social worlds and by doing it hopes to provide the building blocks for the establishment of post keynesian ecological macroeconomics

local currencies for purposive degrowth a quality check of some proposals for changing money as usual this article provides a quality check of the degrowth movement s proposal of local currencies as tools for advancing socially equitable and ecologically sustainable degrowth the article draws comprehensively upon mainly english language academic research about four widespread local currency types lets time banks hour currencies and convertible local currencies clcs to assess their performance with respect to four degrowth related criteria community building advancement of alternative values in economic exchange facilitation of alternative livelihoods and eco localization lets have been found to support alternative livelihoods under quite uncommon conditions and contribute indirectly to eco localization by moderately facilitating informal resale repair and sharing of commercially produced goods although their burdensome management and confinement to small memberships limit their usefulness time banks help expand social networks and are best at reaching the socially excluded however they are confined to unskilled personal services and dependent on grant funding hour currencies do not stand out with regard to any criteria but may have a minor capacity to promote local purchasing clcs are best at attracting local businesses but no significant evidence of their said capacity to localize supply chains has surfaced as yet and their business friendly design works to the detriment of other criteria in sum existing research provides a very weak basis for advocating local currencies as tools for purposive degrowth local currencies are here categorized as two utopian socialist approaches the behind society s back variety of lets and hour currencies and the appeal to elites variety of time banks and clcs marx and engels s critiques of these approaches remain valid successful monetary systems require resources that are not available behind society s back notably the power to levy taxes and designate by which means they can be paid local currencies that appeal for elite support without mass popular backing have shaken off most radical connotations and are vulnerable to changing policy agendas given the present historical conjuncture of popular outrage against the banking sector this paper argues that the degrowth movement would improve its chances of contributing to purposive degrowth by prioritizing government centred ecological reform of the monetary system over local currencies

option bounds in discrete time extensions and the pricing of the american put in a recent paper perrakis and ryan 1984 upper and lower bounds on european option prices were derived in discrete time these bounds were based on an extension of the discrete time derivation of black scholes pricing first presented in the work of black and scholes 1973 the bounds are functions of the stock and exercise prices the riskless rate of interest the time to maturity and the entire distribution of stock returns in other words they need more information than black scholes for their computation and the derived results are weaker on the other hand they are significantly more general in their assumptions insofar as they do not rely on the continuous time riskless hedge of the original black scholes derivations or on the assumption of a binomial distribution of stock returns used in cox ross and rubinstein 1979 and rendleman and bartter 1979 for this reason they are likely to be particularly useful in valuing options on assets for which the black scholes methodology is clearly this paper generalizes and tightens the discrete time bounds for european options and develops similar bounds for american puts the stock return has a distribution with a finite range and is subject to the restriction that the stock be nonnegative beta the bounds are derived from arbitrage portfolios using the stock the option and the riskless asset they converge to the previous ones when the range coincides with the nonnegative real line and they both become equal to the binomial option model under a two state stock return upper and lower bounds for the american put are derived recursively by the same method with arbitrage portfolios involving the stock the riskless asset and american and european puts an example is provided with a trinomial return distribution part of this research was done while i was a visiting professor 1983 84 ecole superieure de commerce et d administration des entreprises reims france i wish to thank peter ryan albert madansky and a referee of this journal for helpful advice and comment while retaining all responsibility for any remaining errors or omissions 1 note however that this is also true of other blackscholes generalizations such as merton 1976

the physical economy of france 1830 2015 the history of a parasite abstract this article explores long term trends and patterns of material use in france for a 185 year period it is the first long term study of material flows for france with national and yearly data for most of the period based on a material flow analysis mfa that is fully consistent with current standards of economy wide mfas and covers domestic extraction imports and exports of materials we investigated the evolution of the french metabolism from industrialization to financialized capitalism over the whole period there is a 9 fold increase in domestic material consumption an expansion of material use per capita and a spectacular addition of abiotic resources fossil fuels and minerals to biotic materials using a world ecology framework we exhibit a specific metabolic path that of a state benefiting from successive world systems for its economic development through massive material imports

why ecological economics needs to return to its roots the biophysical foundation of socio economic systems abstract ecological economics was formally established in 1989 with the ambitious vision of developing a new economic paradigm embedding the social and economic systems in the biophysical world ecological economics had its roots in the biophysical understanding of economics that pioneers of the field georgescu roegen 1971 odum 1971 daly 1977 jansson 1984 martinez alier 1987 and others developed while studying the thermodynamic bedrocks shared by natural and social systems subsequently however ecological economics has explicitly but controversially adopted a big umbrella approach to methodological pluralism focusing more on topics such as valuing nature and its functions rather than attempting to understand and quantify the biophysical roots of economic activities biophysical economics was established in response to these concerns focusing more on developing analyses and models of the transformations of nature to generate wealth and approached mostly from an energy and material flows perspective the present paper argues that to achieve its original vision ecological economics must return to its biophysical roots collaboration between the two fields will help the next generation of thinkers to address the socio ecological challenges of the 21st century requiring an energy transformation called for by aspirations such as the green new deal and the un sustainable development goals

from ecological macroeconomics to a theory of endogenous money for a finite planet abstract this paper takes stock of the achievements and gaps of the emerging field of ecological macroeconomics which has brought insights from specific schools of macroeconomics most notably post keynesian to ecological economics with a strong emphasis on the endogeneity of money ecological macroeconomics has proposed fiscal monetary and prudential reforms to boost green investments and developed new modeling frameworks to explore the interactions between the financial macroeconomic and biophysical spheres while these proposals open a broader range of possibilities to engage in a socio ecological transition than those offered by the current paradigm of a financialized global economy they paradoxically suffer from similar limitations by placing much faith in green investments they impose a vision of the transition that presents strong technical and institutional limitations the field also fails to revisit its own understanding of macroeconomics and of specific phenomena e g financial instability through a biophysical lens in spite of increasing transdisciplinary evidence supporting this approach we suggest overcoming these limitations through institutionalist perspectives that understand money as a language through which value is created and legitimized those perspectives seem essential to re embed the governance of money within a worldview that acknowledges the finiteness and incommensurable values of earth s life support systems

conflicts over carbon capture and storage in international climate governance abstract in the paris agreement ambitious emission targets are accompanied by insufficient mitigation measures it lacks in particular strategies on how to reduce the use of fossil fuels in this context the distinctive prospect of carbon capture and storage ccs reducing emissions albeit using fossil fuels on a large scale is of particular interest ccs technologies promise to solve the climate problem independent of drawn out political disputes and without changing production and consumption patterns conflicts about ccs put the fundamental debate on the agenda whether a comprehensive transformation of social structures is un necessary and un desired in order to solve the ecological crisis therefore in this paper ccs conflicts are analyzed with a broader perspective including their effects on general struggles about international climate governance the key research question is to what extent established social practices and structures become politicized i e challenged based on the presented empirical findings i discuss two theses first that the future of climate governance is contingent on decisions about the continued use of fossil fuels second that ccs conflicts have an explosive force that could lead to massive cracks within the paradigm of ecological modernization and thus could politicize international climate policy

an institutional analysis of payments for environmental services abstract in this paper the characteristics and functioning of pes is analyzed from an institutional perspective while in theory pes is seen as a market solution to environmental problems as an alternative to state hierarchical and community governance a review of a large amount of case studies shows that pes in practice depends rather fundamentally on state and or community engagement hence pes are foremost a reconfiguration of the roles of public bodies and communities becoming core intermediaries or buyers first to establish pes rights to the land that delivers the environmental service must be clarified this demands public action second transacting over environmental amenities is very costly creating markets for environmental services depends therefore crucially on state and community facilitation hence buyers are often public agencies high transaction costs also influence price setting payments do not follow the market format as intermediaries frequently are setting the price with users often being unaware even of the fact that they pay finally the distinction between payments as incentives and as fair compensations is emphasized while payments may strengthen community relations and simplify action for environmental care they may also introduce a purely instrumental logic and in some cases worsen the environmental status by crowding out environmental virtues for the future greater awareness of these dynamics is warranted

ecological economics marxism and technological progress some explorations of the conceptual foundations of theories of ecologically unequal exchange abstract almost regardless of ideological persuasion the seemingly self evident concept of technological progress inherited from early industrialism is resorted to as an article of faith serving to dispel the specter of truncated growth the increasingly acknowledged threats of peak oil and global warming are thus generally countered with visions of a future civilization based on solar power i discuss this technological scenario as a utopia that raises serious doubts about mainstream understandings of what technology really is technological utopianism raises difficult but fundamental analytical questions about the relation between thermodynamics and theories of economic value while marxism and some ecological economics share the ambition of grounding notions of economic value in physical parameters notions of economic value and physical processes should be kept analytically distinct

the approach of ecological economics this paper discusses the major tenets of ecological economics including value pluralism methodological pluralism and multi criteria policy assessment ecological economics offers viable alternatives to the theoretical foundations and policy recommendations of neoclassical welfare economics a revolution in neoclassical economics is currently taking place and the core assumptions of welfare economics are being replaced with more realistic models of consumer and firm behaviour this paper argues that these new theoretical and empirical findings are largely ignored in applied work and policy applications in environmental economics as the only heterodox school of economics focusing on the human economy both as a social system and as one imbedded in the biophysical universe and thus both holistic and scientifically based ecological economics is poised to play a leading role in recasting the scope and method of economic science

a stock flow fund ecological macroeconomic model 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

finding common ground between ecological economics and post keynesian economics abstract post keynesian economics and ecological economics have in common that they are considered to be heterodox schools of thought aside from that there has not been a strong connection between them previous books on post keynesian economics contain no chapter on environmental or ecological issues this neglect has led leading ecological economists to criticize post keynesians for succumbing to the same growth paradigm as the neoclassical school this paper argues that the two approaches are complementary in the sense that they each have different strong points ecological economics has correctly pointed out that the growth of the global economy may not be welfare improving anymore whereas post keynesians have gained valuable insights into the functioning of the capitalist growth process to determine the feasibility of a synthesis between the two schools the paper compares their approaches to the problems of production consumption and economic dynamics as well as the associated policy recommendations it shows that on a theoretical level the two schools have much in common but their policy conclusions differ with regard to the desirability of further growth the paper concludes that a synthesis of both approaches may lead to a better understanding of how a capitalist economy operates in a natural environment with limits to growth and to better informed policy advice

complementary system perspectives in ecological macroeconomics the example of transition investments during the crisis globally societies are facing a number of interrelated environmental economic and social crises this paper is intended to contribute to the development of an ecological macroeconomics that addresses these multiple crises in combination insights from different research communities will be included in this effort taking an ecological economic understanding of sustainability as the point of departure and inspired by systems thinking it is discussed which economic sub systems should be in focus for sustainability transitions and whether relevant guides for sustainability can be formulated for these systems in particular the focus is on systems that are decisive for resource consumption and pollution although their influence on these is indirect a simple typology of sub systems is suggested and applied in relation to an example that highlights the importance of the interplay between macroeconomic provision and distribution systems the example concerns investments in sustainability transitions of provision systems and demonstrates the complexities of implementing such transformations during the economic crisis it also addresses the need for ecological macroeconomics to develop a third position beyond austerity policies and keynesian approaches

environmental regulations and the problem of sustainability moving beyond market failure abstract the standard metaphor of market failure is an impediment to the crafting of environmental policy that can escape policy lock in sustainability requires a policy process that can avoid this lock in sustainability concerns the creation of dynamic human processes that can respond to indeed anticipate unanticipated feedback from biological processes

are we entering the age of involuntary degrowth promethean technologies and declining returns of innovation any reflections on an eventual transition towards a degrowth society have to take into account the current crisis in the dominant system and question whether the latter will be able to grow again or not in order for the latter to happen the role played by technological innovation is crucial this paper starts by reconsidering georgescu roegen s definition of promethean techniques and tainter s principle of declining marginal returns with the aim of providing within the common framework of the theory of complex systems a sound theoretical basis for the analysis of the rise and fall of complex societies the main purpose is to verify whether after the last promethean revolution a great wave emerged or not the second part of the paper presents an initial investigation into this hypothesis using total factor productivity growth as an indicator of marginal returns on innovation 1750 2015 despite the limitations implicit in the use of this indicator data show three cycles of innovation corresponding to the first second and third industrial revolutions but of different magnitude and duration in particular the whole cycle that began with the first industrial revolution in england around 1750 reached a peak in the u s in the nineteen thirties and later declined following a trend that basically confirms the great wave hypothesis even recent innovations resulting from the ict revolution however considerable do not seem capable of counteracting this long term trend data on returns on innovation seem therefore to be coherent with evidence provided by research in other fields energy mineral resources agriculture health education and scientific research showing that advanced capitalist societies have entered a phase of declining marginal returns or involuntary degrowth with possible major effects on the system s capacity to maintain its present institutional framework

energy expenditure economic growth and the minimum eroi of society we estimate energy expenditure for the us and world economies from 1850 to 2012 periods of high energy expenditure relative to gdp from 1850 to 1945 or spikes 1973 74 and 1978 79 are associated with low economic growth rates and periods of low or falling energy expenditure are associated with high and rising economic growth rates e g 1945 1973 over the period 1960 2010 for which we have continuous year to year data for control variables capital formation population and unemployment rate we estimate that statistically in order to enjoy positive growth the us economy cannot afford to spend more than 11 of its gdp on energy given the current energy intensity of the us economy this translates in a minimum societal eroi of approximately 11 1 or a maximum tolerable average price of energy of twice the current level granger tests consistently reveal a one way causality running from the level of energy expenditure as a fraction of gdp to economic growth in the us between 1960 and 2010 a coherent economic policy should be founded on improving net energy efficiency this would yield a double dividend increased societal eroi through decreased energy intensity of capital investment and decreased sensitivity to energy price volatility

ecological macroeconomics an application to climate change ecological economics has not paid sufficient attention to the macroeconomic level both in terms of theory and modeling 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 holistic 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 authors abstract

stock flow matching and the performance of the labor market we estimate outflow equations for vacancies and unemployed workers in britain departing from the stock based analysis of matching in two ways first we deal with the temporal aggregation problem that arises when discrete time data are used to describe continuous time processes second we allow for a stock flow matching mechanism in which the stock of traders on one side of the market matches with the flow of traders on the other side our estimates are in line with the predictions of stock flow matching in terms of higher exit rates of flows and of matching combinations between labor market stocks and flows furthermore employer search effectiveness did not seem to decline between the 1960s and the 1990s nevertheless some deterioration in worker search effectiveness is detected however less severe than that implied by previous stock based work

eroi of different fuels and the implications for society abstract all forms of economic production and exchange involve the use of energy directly and in the transformation of materials until recently cheap and seemingly limitless fossil energy has allowed most of society to ignore the importance of contributions to the economic process from the biophysical world as well as the potential limits to growth this paper centers on assessing the energy costs of modern day society and its relation to gdp our most important focus is the characteristics of our major energy sources including each fuel s energy return on investment eroi the eroi of our most important fuels is declining and most renewable and non conventional energy alternatives have substantially lower eroi values than traditional conventional fossil fuels at the societal level declining eroi means that an increasing proportion of energy output and economic activity must be diverted to attaining the energy needed to run an economy leaving less discretionary funds available for non essential purchases which often drive growth the declining eroi of traditional fossil fuel energy sources and the effect of that on the world economy are likely to result in a myriad of consequences most of which will not be perceived as good

the euthanasia of the rentier a way toward a steady state economy abstract a positive interest rate has many impacts on ecology one of them is the pushing of economic growth in the present economy accumulation of capital is an end in itself according to the golden rule of accumulation the extension rate of the capital stock is equal to the interest rate however in the present economic conditions the interest rate is always significantly higher than zero due to the liquidity premium of money keynes in this context old proposals such as the free money approach of silvio gesell could provide interesting solutions gesell wanted to neutralize the liquidity premium by putting artificial carrying costs on money by increasing the stock of capital assets without being interrupted by economic crises the interest and profitability level should be reduced down to zero because in this situation every marginal saving and marginal investment would cause a negative interest or profitability rate they would be stopped though keynes was very excited by the proposals of gesell he criticized the fact that gesell did not see many of the further obstacles however these obstacles could be overcome by means of further institutional reforms

ecological monetary economics a post keynesian critique the monetary analysis of some ecological economists currently appears to be mostly articulated around the following core a stationary economy and a fortiori a degrowth economy is incompatible with a system in which money is created as interest bearing debt to question the relevance of the debt money positive interest rate output growth nexus this paper adopts a critical stance towards the currently emerging ecological monetary economics from the standpoint of another strand of heterodox economics the post keynesian approach in its current state ecological monetary economics is at odds with post keynesian economics in its analysis of the money growth relationship this will be shown using the theory of endogenous money and a simple cambridgian kaleckian model where debt money and a positive interest rate are compatible with a full stationary economy

the shallow or the deep ecological economics movement ecological economics and its policy recommendations have become overwhelmed by economic valuation shadow pricing sustainability measures and squeezing nature into the commodity boxes of goods services and capital in order to make it part of mainstream economic financial and banking discourses there are deeper concerns which touch upon the understanding of humanity in its various social psychological political and ethical facets the relationship with nature proposed by the ecological economics movement has the potential to be far reaching however this is not the picture portrayed by surveying the amassed body of articles from this journal or by many of those claiming affiliation a shallow movement allied to a business as usual politics and economy has become dominant and imposes its preoccupation with mainstream economic concepts and values if instead ecological economists choose a path deep into the world of interdisciplinary endeavour they will need to be prepared to transform themselves and society the implications go far beyond the pragmatic use of magic numbers to convince politicians and the public that ecology still has something relevant to say in the 21st century author s abstract

on modeling and interpreting the economics of catastrophic climate change with climate change as prototype example this paper analyzes the implications of structural uncertainty for the economics of low probability high impact catastrophes even when updated by bayesian learning uncertain structural parameters induce a critical tail fattening of posterior predictive distributions such fattened tails have strong im plications for situations like climate change where a catastrophe is theoretically possible because prior knowledge cannot place sufficiently narrow bounds on overall damages this paper shows that the economic consequences of fat tailed structural uncertainty along with unsureness about high temperature damages can readily outweigh the effects of discounting in climate change policy analysis

does credit create a growth imperative a quasi stationary economy with interest bearing debt abstract this paper addresses the question of whether a capitalist economy can ever sustain a stationary or non growing state or whether as often claimed capitalism has an inherent growth imperative arising from the charging of interest on debt we outline the development of a dedicated system dynamics macro economic model for describing financial assets and liabilities in a stock flow consistent framework falstaff and use this model to explore the potential for stationary state outcomes in an economy with balanced trade credit creation by banks and private equity contrary to claims in the literature we find that neither credit creation nor the charging of interest on debt creates a growth imperative in and of themselves this finding remains true even when capital adequacy and liquidity requirements are imposed on banks we test the robustness of our results in the face of random variations and one off shocks we show further that it is possible to move from a growth path towards a stationary state without either crashing the economy or dismantling the system nonetheless there remain several good reasons to support the reform of the monetary system our model also supports critiques of austerity and underlines the value of countercyclical spending by government