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“…as I wrote above, I am too very critical of neoclassical economics, and I think heterodox economics schools like post-Keynesian economics and institutional economics are relevant. Yet, I think for the most part even these heterodox economic schools entirely ignored the issue of sustainability and thermodynamics, especially given that we’re not facing the consequence of such ignorance of two centuries in the form of climate crisis and environmental breakdown.
There now are some post-Keynesians who engage with these issues, but it seems that 95% of “heterodox” ones still even fail to register that we’re now facing such crises.
So I believe heterodox economists (and those who try to be heterodox) should account for environment and thermodynamics, and that’s the reason I think your research is timely and important.
My feeling is that to engage with heterodox economists and convince them to look into these issues more, we should speak their language. I think that an imminently important and doable task would be trying to make a model of aggregate demand determination and distribution in terms of either (or both) energy and low-entropy matter.
In fact, it seems that there is a Kaleckian aspect in the distribution of, say, energy, in that, in an economy, energy is distributed between households(who use energy to mostly survive and for leisure) and capitalists(or, say, factories, who use energy to produce goods and services that households will later consume), and I think it might be possible to delineate how two interact with each other and eventually aggregate demand is determined and income is distributed again.
(Of course, I think such model should account for energy inequality too, in there there’s a huge disparity between high-income earners and low-income earners in terms of their energy and resource consumption)
On the other hand, it might be said that a Goodwin model can be used to explain the issue of energy and sustainability in general, in that, at least it seems to me, there is indeed a predatory-prey relationship between those who consume more resources (and cause more pollution and other types of damages) and those who consume less.
So, my main question is this: do you think there can be a Kaleckian or a Goodwin model that accounts for energy and natural resources – or that treats them as “factors of production” – and explain the determination of aggregate demand and income distribution? Or do you know any researches that have done this? (as far as I know, there has been none).
I know that you’re skeptical of the concept of “factor of production”, but I think it’s at least now a sensible thing to do (for instance, Steve Keen showed that a Leontief production function that treats energy as an independent factor of production clearly explain the historical trend of GDP and energy consumption)…”
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