Quotation Monasterolo, Irene, Raberto, Marco. 2017. The EIRIN Flow-of-funds Behavioural Model of Green Fiscal Policies and Green Sovereign Bonds. Ecological Economics 144, 228-243.




Fiscal and monetary policies, as well as new financial instruments, could play a key role to meet the Paris Agreement. However, deep uncertainty characterizes their design and their potential effects on growth, financial and credit market stability, and inequality. We develop the EIRIN flow-of-funds behavioural model to simulate the introduction of green fiscal policies and green sovereign bonds, and we display their effects on firms' investments in the brown and green sector, on unemployment, on the credit and bonds market. EIRIN is Stock-Flow Consistent and is rooted on a balance sheet approach. It adopts a Leontief production function with no substitution of the production factors, i.e., Labour, Capital, and Raw Materials. Its sectors are endowed with adaptive behaviours and expectations, and interact with the others and the foreign sector through a set of markets. Simulations show that green public policies can promote green growth by influencing firms’ expectations and the credit market. Green sovereign bonds represent a short-term win-win solution, while green fiscal measures have higher immediate distributive effects that induce negative feedbacks on the economy. These results are influenced by the conditions (fiscal, budgetary and public debt/GDP) in which both measures are implemented.


Press 'enter' for creating the tag

Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Ecological Economics
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-B, VW-C, WH-B
Language English
Title The EIRIN Flow-of-funds Behavioural Model of Green Fiscal Policies and Green Sovereign Bonds
Volume 144
Year 2017
Page from 228
Page to 243
Reviewed? Y
URL http://www.sciencedirect.com/science/article/pii/S0921800916306000
DOI http://dx.doi.org/10.1016/j.ecolecon.2017.07.029


Monasterolo, Irene (Details)
Raberto, Marco (University of Genova, Italy)
Institute for Ecological Economics IN (Details)
Google Scholar: Search