MISUM meets Yannis Dafermos
Yannis Dafermos of the New Economics Foundation joins us for an open seminar to discuss some of the most pressing issues of our time.
How can we design our economy so that it is financially stable, provides high levels of wellbeing for all and yet stays within the ecological boundaries of our planet?
Is it possible to have full employment whilst reducing our consumption of fossil fuels and increasing our use of renewable energy? Can our banking system fund such a transition without the creation of financial fragility and unsustainable debt levels?
These are the questions Dafermos and his colleagues are trying to answer. In a project funded by the New Economics Foundation, they are building a macroeconomic model that aims to be consistent with both financial and ecological flows.
Standard macroeconomic models assume that energy and matter are available without limit, and the degradation of the ecosystem has no feedback effects on the macro-economy. Ecological economics addresses this problem by analyzing the physical flows between the ecosystem and the economy, but it lacks a coherent conception of financial flows. By integrating post-Keynesian economics, which has a long tradition of integrating the financial sector into macroeconomic models, with ecological economics, Yannis Dafermos and his colleagues aim to create a new framework that recognizes that the macro-economy is fundamentally shaped by financial stocks and flows, and that it is also firmly placed within the confines of a finite ecosystem. They hope to shed light on the channels through which the ecosystem, the financial system and the macro-economy interact. The framework challenges neoclassical conceptions of the economy, setting the stage, hopefully, for an interesting debate.
Registration to the seminar is not required, everybody is welcome!