Economy-Finance-Environment-Society Interconnections In a Stock-Flow Consistent Dynamic Model

Emilio Carnevali, Matteo Deleidi, Riccardo Pariboni, Marco Veronese Passarella*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


This work takes inspiration from four theoretical strands: recent developments in ecological macroeconomics; the Schumpeterian framework of evolutionary economics that emphasises the entrepreneurial role of the State; the stock-flow consistent approach to macroeconomic modelling; and the supermultiplier model. Building upon these approaches, we develop a formal model that reproduces key interactions between the economy, the financial sector, the ecosystem and the society. We test and assess the effects of several fiscal policies. We find that, in principle, mission-oriented innovation policies are the most effective option in supporting innovation and growth, while reducing income inequality. However, lacking a ‘green’ and progressive taxation system, they are unlikely to reverse the current trend in atmospheric temperature.
Original languageEnglish
Pages (from-to)844-878
Number of pages35
JournalReview of Political Economy
Issue number2
Early online date12 Sept 2023
Publication statusPublished - 2 Apr 2024

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