A Kaleckian model with natural capital and eco-efficiency growth: is green growth possible in the short and long run? *
Abstract
There is a growing interest in green growth policies. The Keynesian approach supports policy effects on demand but has not fully addressed its long-run effects on resource supply constraints. This study presents a Kaleckian model incorporating natural capital and eco-efficiency growth, examining policy effects in both the short and long run. The authors show that environmental policies increase growth in the short run under a wage-led growth regime. In the long run, the economy may diverge, with natural capital and economic growth declining. Substantially strengthened policies can help the economy avoid this and reach a sustainable steady state with moderate growth.
Fields of Study & Subjects
Sustainable Development and Environmental Policy
Global Energy and Sustainability Research
Sustainability and Ecological Systems Analysis
Publication details
- Journal / source
- Review of Keynesian Economics
- Publisher
- Edward Elgar Publishing
- Volume
- 14
- Issue
- 3
- Pages
- 422–450
- Publication date
- 1 August 2026