heterodox economics research papers

Browse Econ Literature

• Working papers
• Software components
• Book chapters
• JEL classification

More features

• Subscribe to new research

RePEc Biblio

Author registration.

• Economics Virtual Seminar Calendar NEW!

The Future of Heterodox Economics

• Author & abstract
• 16 References
• Most related
• Related works & more

Corrections

• Teresa Ghilarducci
• Zachary Knauss
• Richard McGahey
• William Milberg
• Drew Landes

( Schwartz Center for Economic Policy Analysis (SCEPA) )

Suggested Citation

Download full text from publisher, references listed on ideas.

Follow serials, authors, keywords & more

Public profiles for Economics researchers

Various research rankings in Economics

RePEc Genealogy

Who was a student of whom, using RePEc

Curated articles & papers on economics topics

Upload your paper to be listed on RePEc and IDEAS

New papers by email

Subscribe to new additions to RePEc

EconAcademics

Blog aggregator for economics research

Cases of plagiarism in Economics

About RePEc

Initiative for open bibliographies in Economics

News about RePEc

Questions about IDEAS and RePEc

RePEc volunteers

Participating archives

Publishers indexing in RePEc

Privacy statement

Found an error or omission?

Opportunities to help RePEc

Get papers listed

Have your research listed on RePEc

Open a RePEc archive

Have your institution's/publisher's output listed on RePEc

Get RePEc data

Use data assembled by RePEc

• Economics Dept
• Press Room & Testimony
• Climate Change
• critical economics

Is There a Future for Heterodox Economics?

• Share Facebook Twitter

Paper | This paper assesses economics research and teaching frameworks in the United States by examining how knowledge is produced and ranked, the flaws and strengths of heterodox economic theory; and how students are trained, especially for careers in economic policy. 

By: Teresa Ghilarducci, Zachary Knauss, Richard McGahey, William Milberg, Drew Landes

This study considers how the field of economics has developed to help the public understand capitalism. Challenges to orthodox theory need to be analytically sound and many economists, in and out of the so-called mainstream, want their work to be the basis for economic justice, democracy, and environmental sustainability. Despite a record length of economic recovery since the trough of the Great Recession in 2008, there is concern about a repeat of the financial crisis. All of this angst is reflected in a wave of nationalism, xenophobia, protectionism and a deep political divide. (Stiglitz 2019 has argued that this divide has itself exacerbated existing economic inequities.) Economics should be a tool both to understand and address these problems, but in spite of successful individual analyses around issues like minimum wage, climate change, trade, inequality, and discrimination, the methodological core of modern economics is relatively untouched. Alternative or ‘heterodox’ visions have achieved littletraction in most economic departments, and modern economics is isolated from other social sciences and fields of inquiry. Given the inadequacies of mainstream economics, understanding why alternative visions have not been more successful is of paramount importance. This ambitious project is approached by focusing on what is perceived to be barriers to the success of existing alternative economic theories and policies. Three types of barriers are considered: (1) the hegemony of neoclassical economics within the economics profession; (2) limits of heterodox economics itself; and (3) weaknesses in pedagogical practices of heterodox economics from high school and community college teaching through graduate training. 

Read the paper in the Journal of Philosophical Economics . 

SCEPA’s Twitter Feed

• Older Workers Report
• Retirement Tools
• 25th Anniversary
• Annual Reports

Copyright ©2024 Schwartz Center for Economic Policy Analysis The New School

Privacy Policy | Terms & Conditions  | Cookie Policy  

SCEPA Updates

Please complete all required fields!

By subscribing, you agree to our Terms and Conditions  and Privacy Policy , including our Use of Cookies. Your personal data is not stored on this website, however, by submitting this form, you are agreeing to the terms governed by Constant Contact. Constant Contact lawfully transfers and protects the personal data of EU/EEA residents to the U.S. pursuant to the rules of the Federal Trade Commission and the EU.

Stay connected.

What is Heterodox Economics? Conversations with Historians of Economic Thought

• Published: 27 October 2007
• Volume 36 , pages 97–108, ( 2007 )

Cite this article

• Mary V. Wrenn 1  

142 Accesses

11 Citations

8 Altmetric

Explore all metrics

Since its intellectual inception, the development of the economics discipline has been accompanied by divergence of thought. Through the years, particularly in the latter half of the twentieth century, a fissure has emerged within the discipline, sociologically dividing conventional, mainstream economics from the dissention of heterodox economics. The nature of that division, however, as well as the nature of heterodox thought is unclear. Historians of economic thought would seem to be uniquely suited to specify the nature of heterodox economics and the mechanism of its marginalization. Although anecdotal, personal interviews with historians of economic thought provide a breadth and depth of study not available through surveys with an immediacy not allowed by doctrinal examination. The purpose of this study and intent of this paper is to reveal the ways that orthodox and heterodox economics differ, whether heterodox economics has any clear research program other than criticizing the limits of the more orthodox view, and what aspects of heterodox economics remain underdeveloped, all through the lens of the historian of economic thought.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price includes VAT (Russian Federation)

Instant access to the full article PDF.

Rent this article via DeepDyve

Institutional subscriptions

Similar content being viewed by others

Heterodox Economics

Response from Péter Róna

Teleological Reasoning in Economics

Backhouse, R. E. (2004). A suggestion for clarifying the study of dissent in economics. Journal of the History of Economic Thought , 26 (2), 261–71 June.

Article   Google Scholar  

Blaug, M. (1997). Economic theory in retrospect (5th ed.). Cambridge: Cambridge University Press.

Google Scholar  

Boulding, K. E. (1957). Institutional economics: A new look at institutionalism. American Economic Review , 47 (2), 1–27.

Breit, W., & Ransom, R. L. (1998). The academic scribblers (3rd ed.). Princeton, NJ: Princeton University Press.

Brue, S. L., & Grant, R. R. (2007). The evolution of economic thought (7th ed.). Mason, OH: Thomson South-western.

Ekelund Jr., R. B., & Hebert, R. F. (2004). A history of economic theory & method (4th ed.). Long Grove, IL: Waveland Press reissue.

Fusfeld, D. (2002). The age of the economist (9th ed.). Boston: Addison-Wesley.

Gruchy, A. G. (1967). Modern economic thought . New York: A.M. Kelley.

Heilbroner, R. L. (1999). The worldly philosophers (7th ed.). New York: Touchstone.

Hunt, E. K. (2002). History of economic thought: A critical perspective (2nd ed.). Armonk: M.E. Sharpe.

Landreth, H., & Colander, D. C. (2002). History of economic thought (4th ed.). Boston: Houghton Mifflen.

Lee, F. (2002). The Association for Heterodox Economics: Past, present, and future. Journal of Australian Political Economy , 50 , 29–43.

Rima, I. H. (2001). Development of economic analysis (6th ed.). London: Routledge.

Roll, E. (1992). A history of economic thought (5th ed.). London: Faber and Faber.

Screpanti, E., & Zamagni, S. (2005). An outline of the history of economic thought . Oxford: Oxford University Press.

Spiegel, H. W. (1991). The growth of economic thought (3rd ed.). Durham: Duke University Press.

Vaggi, G., & Groenewegen, P. (2006). A concise history of economic thought : From merchantilism to monetarism . New York: Macmillan.

Wrenn, M. V. (2004). What is Heterodox Economics,? Ph.D. dissertation, Economics, Colorado State University, Fort Collins

Download references

Acknowledgement

Mary V. Wrenn wishes to acknowledge gratefully the historians of economic thought who kindly agreed to be interviewed. The author would like to thank the Goddard School of Business and Economics at Weber State University for the generous support provided through their Vitality Grant and the University for its thoughtful commitment to and support of junior faculty through the Weber Writes grant, and anonymous referees.

Author information

Authors and affiliations.

Economics Department, Weber State University, 3807 University Circle, Ogden, UT, 84408, USA

Mary V. Wrenn

You can also search for this author in PubMed   Google Scholar

Corresponding author

Correspondence to Mary V. Wrenn .

Interview Questions

The nature of the personal interview requires questions be asked verbally. The following questions should not therefore be interpreted as a strict verbatim script by which the interviews followed, although all questions were asked of all participants.

Which history of economic thought/methodology classes have you taught?

In those history of thought/methodology classes did you and if so, how much, time did you spend discussing heterodox economics?

What qualifies a school of thought or an individual as heterodox?

Which groups of thought would you consider to be heterodox economic schools of thought?

How would you describe the relationship between different heterodox schools of thought? Between heterodox and orthodox economics? Continuum, threshold, another way to describe these relationships?

How would you describe the current state of heterodox economics?

What would you describe as the main weaknesses of heterodox economics?

What would you describe as the main strengths of heterodox economics?

Are you a heterodox economist?

Is (are) there any current world event(s) that might make heterodox economics more acceptable or incorporated into the mainstream?

Rights and permissions

Reprints and permissions

About this article

Wrenn, M.V. What is Heterodox Economics? Conversations with Historians of Economic Thought. For Soc Econ 36 , 97–108 (2007). https://doi.org/10.1007/s12143-007-9002-5

Download citation

Published : 27 October 2007

Issue Date : October 2007

DOI : https://doi.org/10.1007/s12143-007-9002-5

Share this article

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Heterodox economics
• History of economic thought and methodology
• Heterodox movement
• Find a journal
• Publish with us
• Track your research

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to  upgrade your browser .

•  We're Hiring!
•  Help Center

Heterodox Economics

• Most Cited Papers
• Most Downloaded Papers
• Newest Papers
• Save to Library
• Last »
• Post-Keynesian Economics Follow Following
• History of Economic Thought Follow Following
• Political Economy Follow Following
• Philosophy Of Economics Follow Following
• History of Economics Follow Following
• Marxist political economy Follow Following
• Financialization Follow Following
• Neoliberalism Follow Following
• Marxism Follow Following
• Economic History Follow Following

Enter the email address you signed up with and we'll email you a reset link.

• Academia.edu Publishing
•   We're Hiring!
•   Help Center
• Find new research papers in:
• Health Sciences
• Earth Sciences
• Cognitive Science
• Mathematics
• Computer Science
• Academia ©2024

Registrations Open for the AHE 2024 Conference

10 Women in Heterodox Economics that You Should Know About

AHE Webinar: The Argentina of Javier Milei

Webinar Recording – Political Economy of Palestine

Inflation: Price Shocks, Profits and Conflict – Open University Webinar

Structuralist and Behavioral Macroeconomics: Seminar with Professor Peter Skott

AHE Webinar – Heterodox Economics and the Political Economy of Palestine

Call for Papers – AHE 2024 Conference

• current issue
• job postings
• heterodox resources
• book reviews
• submit entry

The current issue of the Heterodox Economics Newsletter

The current issue is No. 325 , April 1, 2024. Our next issue is scheduled on April 22, 2024.

All queries should be send to [email protected] . For submissions to the Newsletter you may also use our Online-Submission Tool .

The Heterodox Economics Directory

Access your all-inclusive guide to heterodox economics on the web or as a more comfortable pdf-Version .

The Heterodox Economics Directory contains information on heterodox economic associations, graduate and post-graduate programs, journals and book-series and much more.

Any suggestions or queries with regard to the Directory should be send to [email protected] .

Subscription Count

As of January 1st, 2023 the Heterodox Economics Newsletter has more than 8,000 Subscribers.

What is Heterodox Economics?

Heterodox Economics is an umbrella term covering various strands of economic thought as well as a series of interdisciplinary research fields. While heterodox economics is internally highly diversified, most heterodox economists agree on certain conceptual definitions (e.g. doing economics is to study the process of social provisioning in a broad sense), theoretical foundations (e.g. the role of uncertainty in economic action or the importance of the principles of effective demand and endogenous money) and a common epistemological framework, that takes the form of pluralist engagement.

These commonalities imply that heterodox economists do not necessarily reject any analysis based on the "holy trinity" of conventional economics, i.e. scarcity, rationality and equilibrium, but contest that, as in the current state of the economic discipline, economic research should always assume this holy trinity as the only relevant starting point for economic thought. Hence, while heterodox economics is on the one hand simply an open-minded, interested and critical starting point for analyzing economic issues, it also serves as a common denominator for those economic views, which are increasingly marginalized within the economics' profession.

"Heterodox economics refers to economic theories and communities of economists that are in various ways an alternative to mainstream economics. It is a multi-level term that refers to a body of economic theories developed by economists who hold an irreverent position vis-à-vis mainstream economics and are typically rejected out of hand by the latter; to a community of heterodox economists whom identify themselves as such and embrace a pluralistic attitude towards heterodox theories without rejecting contestability and incommensurability among heterodox theories; and to the development of a coherent economic theory that draws upon various theoretical contributions by heterodox approaches which stand in contrast to mainstream theory." (Frederic S. Lee, 2008. in The New Palgrave Dictionary of Economics)

A slightly more extensive introduction to heterodox economics is provided here.

Editorial Policy of the Newsletter

The Heterodox Economics Newsletters includes items topically related to heterodox economics and interdisciplinary economic research. It has an inclusive scope and basically relies on external submissions, which are edited according to some formal standards and compiled into a comprehensive document. Submissions can be made via [email protected] as well as our Online-Submission Tool .

The Newsletter covers the following rubriques:

• Calls for Papers of all forms (conferences, journals...)
• Calls for Participants (all events where the submission of a paper is no requirement for participation)
• Heterodox Economic books and book series (typically short descriptions with links to the books)
• Queries, Newsletters and (occasional) Media Reports
• Information on awards related to heterodox economics and interdisciplinary social research
• Information on heterodox graduate programs, scholarschips and grants
• Job Postings
• Table of Contents of economic journals open to heterodox submissions published mainly in English (journal coverage in the Heterodox Economics Newsletters is largely based on automated Table of Content-Alerts; if you miss the coverage of some journal do not hesitate to contact us)
• PhD Dissertations in Heterodox Economics (if you want us to include a note on your recently finished dissertation please inform us on the title, author's name and email address, abstract, institution, date completed, and advisor's name; A longer summary is optional)
• Book Reviews (see below)

As a rule the Newsletter tries to be as comrehensive and accessible as possible and therefore includes items only once.

Book Reviews in the Heterodox Economic Newsletter

Anyone interested in reviewing books for the Newsletter should contact our book-review editor Erik Dean to request a complementary copy of the book they wish to review.

Guidelines for Book Reviews in the Heterodox Economics Newsletter can be found here .

Main Editor

• Jakob Kapeller
• University Duisburg-Essen
• Institute for Socio-Economics
• ICAE@JKU Linz
• personal website

Editorial Team

• Daniela Cialfi Alexander Cruz Alam Galicia-Robles Niklas Klann Johanna Rath

Book Review Editor

• Daniela Cialfi
• University of Chieti-Pescara

Search the Archives

Social media, heterodox associations.

• Association for Evolutionary Economics (AFEE)
• Association for Institutional Thought (AFIT)
• Association for Heterodox Economics (AHE)
• Association for Social Economics (ASE)
• European Association for Evolutionary Political Economy (EAEPE)
• French Association for Political Economy (FAPE)
• International Association for Feminist Economics (IAFFE)
• International Initiative for Promoting Political Economy (IIPPE)
• Post-Keynesian Economics Study Group (PKSG)
• Society of Heterodox Economists (SHE)
• Union for Radical Political Economics (URPE)
• World Economics Association (WEA)

Former Editors

• Frederic S. Lee : Founding Editor, 2004-2009
• Tae-Hee Jo and Ted P. Schmidt: 2009-2013

An official website of the United States government

The .gov means it’s official. Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

The site is secure. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

• Publications
• Account settings

Preview improvements coming to the PMC website in October 2024. Learn More or Try it out now .

• Advanced Search
• Journal List
• Springer Nature - PMC COVID-19 Collection
• PMC10191080

Expanding the possible: exploring the role for heterodox economics in integrated climate-economy modeling

J. christopher proctor.

1 Sorbonne University Alliance, University of Technology of Compiègne, Costech laboratory, Compiègne, France

2 Roma Tre University, Rome, Italy

Associated Data

The paper presents no data.

This paper explores the degree to which heterodox economics can contribute to the development and use of climate-economy integrated assessment models. To do so, it introduces the field of integrated assessment modeling, with a focus on the core economic methodology used by various types of models. It then summarizes some of the literature critiquing these models and how they inform policy. The paper then provides an extended classification of ways in which heterodox economics could be applied to climate-economy models and presents a number of storylines, or pathways, which could be created using insights and methods from heterodox schools. The paper concludes with an assessment of the scope for heterodox economics to answer the criticisms of climate-economy models, finding that despite not resolving all issues, the heterodoxy has a substantial role to play.

Introduction: extreme stories to expand the possibility space

In late February 2020, just days before Europe and the USA joined China and much of Asia in imposing severe mobility restrictions in response to the COVID-19 pandemic, David McCollum and his colleagues published a short Nature Commentary piece calling on climate-economy modelers to “explore extremes” in their modeling (McCollum et al. 2020 ). Although these models, which attempt to create plausible scenarios of technological, social, economic, and environmental development for the next 80 years, could arguably be described as highly formalized forms of science fiction, the plot-lines investigated by these models are strikingly dull. Where, they ask, are the wars? The geopolitical realignment? The economic panics and shocks? The massive waves of structural economic changes and resulting backlash of social resistance? Where is the space for the wildcards, which are “not even on the radar” (Ibid.)? Their advice was well timed, although their extensive list of specific examples of extremes failed to include the global pandemic which had already quietly begun.

Part of the lack of extreme climate-economy scenarios comes from a failure to pose out-of-the-box research questions to the existing suite of models which have already been built. But part comes directly from the limitations of the models themselves. In their extensive review of the capabilities and limits of the existing integrated assessment modeling literature, Keppo et al. ( 2021 ), speak of “exploring the possibility space,” as according to them, “what is not included within the boundaries of the space to be explored cannot be found.” This paper takes the notions of a possibility space for integrated assessment modeling and turns it towards the realm of heterodox economics.

The various schools of thought and research programs that make up heterodox economics typically operate within more open theoretical frameworks and are generally more comfortable with analyzing extreme potentialities than their neoclassical corollaries. From the notion of government-maintained full employment to a vision of prosperity without economic growth, from an understanding of social reproduction and care to a focus on the evolution of institutions and the development of technology, heterodox economics offers a rich range of ideas and tools that could be useful in understanding what policy makers can, and should, do to resolve the climate crisis.

The purpose of this paper is to assess the degree to which the existing suite of heterodox ideas and tools can contribute directly to the development and use of large scale, quantitative, integrated assessment models in order to expand and improve the stories told by these models. To do this, Section.  2 will start with a short review of integrated assessment models and the criticisms levied against them. Section  3 will then procced to a classification of the potential conceptual and methodological contributions heterodox economics could make to understanding the transition to an emission-free global economy, with examples given for how individual concepts could be incorporated. Section  4 will attempt to use the ideas identified as most relevant to create a number of new climate scenarios which would not be readily told with standard climate-economy models. Finally, Sect.  5 will conclude with an assessment of the usefulness of heterodox economics in responding to the limits of integrated assessment modeling.

Integrated assessment models and their discontents

Integrated assessment models.

Integrated assessment models (IAMs) are a class of quantitative models that combine economic and climatic considerations. These models are built by integrating together a number of separate “modules” which represent different aspects of the economy-climate system. IAMs typically have both an economy module and a climate module which projects emissions and their corresponding levels of warming (Cattan and McIsaac 2021 ). Simple models stop here, but the most developed IAMs can add many more modules for systems such as energy, technological development, agriculture, land use, and much more. While some simpler IAMs remain fairly abstract, the more complex models can provide an impressive range of projections at a very high resolution, down to the levels of an individual technology adopted in each year (IRENA 2020 ).

IAMs can be divided into two primary categories according to the research questions they address (IPCC 2022a , 1858). The first, cost–benefit models , compare the expected levels of economic damages that will be caused by climate change with the expected costs of mitigating emissions in order to calculate an optimal growth path for the economy. The second, process-based models , attempt to replicate the connections between various systems or processes which are relevant for climate mitigation (Ibid.). This involves modeling the linkages between various economic, social, and physical systems to create emission scenarios and climate pathways which represent plausible futures. Because of their orientation towards scenario analysis, process base models can also be called emission pathway models .

Prior to the 2015 Paris Agreement, cost–benefit models were frequently used to calculate the optimal level of global emissions, and by extension warming, under various sets of assumptions and model parameters (Nordhaus 1992 , 1993 ). While this research question is still addressed in the post-Paris literature (Glanemann et al. 2020 ; Hänsel et al. 2020 ), the clear 2-degree and 1.5-degree limits agreed to by the international community have facilitated a shift in focus from determining the ideal level of warming towards finding pathways to achieving these fixed emission caps.

Emission pathways models have become highly influential in informing national policy and in tracking international progress in mitigating emissions (Süsser et al. 2021 ). Emissions pathways models are also a core tool of the Intergovernmental Panel on Climate Change (IPCC) reports, with over 3000 scenarios from 191 models submitted for the Sixth Assessment Report on the Mitigation of Climate Change (IPCC 2022a , 1882). A representative story of the kinds of features of the scenarios included in the recent IPCC reports can be found in Table ​ Table1. 1 . As this paper is focused primarily on economic scenario analysis, it will prioritize a discussion of emission pathway models and their economic foundations.

A representative story of achieving the 1.5- or 2-degree limits according to the scenarios included in recent IPCC reports

Author’s elaboration.

The core economics module of each IAM can be designed in a number of different ways. While the results of each model will be determined to a large degree by the specific assumptions and calibrations that go into it, the choice of model structure places key limits on what is possible within the model’s representation of the economic system.

A useful classification of IAMs based on their economic cores is provided by Nikas et al. ( 2019 ) who divide IAMs into optimal growth models (corresponding to cost–benefit models above), general equilibrium models, partial equilibrium models, macroeconometric models, and other process-based models. This last “other” category is helpfully expanded upon by Hafner et al. ( 2020 ) who add system dynamics models, agent-based models, and stock-flow consistent models.

The most common method for building emission pathway models is a computable general equilibrium (CGE) framework in which the path of the entire economy is optimized, typically at a sectoral level (Matsumoto and Fujimori 2019 ). Partial-equilibrium models, in which one sector is fully optimized while the rest of the economy is assumed to follow the status quo, are also common, with many partial-equilibrium frameworks focusing on the energy system. These two equilibrium frameworks can be augmented by including various market imperfections and frictions which would prevent the baseline scenario from achieving an optimal state in the short or medium term, but this technique is at the cutting edge of equilibrium climate modeling (Köberle et al. 2021 ).

Macroeconometric models also include a full representation of the economic system, but unlike CGE models, they are not based on an optimizing function (IPCC 2022a , 1845). Instead, they use real-world data to econometrically calibrate the coefficients of the relationships between the modeled variables, building a web of statistical relationships which can be simulated forward to create scenarios (Lehr and Lutz 2019 ). This structure allows the overall levels of economic activity to fluctuate within the model based on the demand generated in previous periods, creating more dynamic economic effects than are typically obtained in an equilibrium framework (Mercure et al. 2019 ). System dynamics, agent-based, and stock flow consistent models, are all associated with heterodox economics and will be described in Sect.  3 .

Their discontents

By their very nature, IAMs are highly interdisciplinary endeavors. This opens them up to criticism from a wide range of fields and perspectives, as their holistic scope touches on dozens of domains across the physical and social sciences. A full accounting of the critiques of IAMs is far beyond the scope of this article, but a summary is necessary to identify the areas where contributions from heterodox economics are most promising. For a more complete review of these critiques, Keppo et al. ( 2021 ), Gambhir et al. ( 2019 ), and Chapter 3 on Mitigation Pathways Compatible with Long-term Goals of the IPCC’s 6th Assessment Report on Mitigation of Climate Change (Riahi et al. 2022 ) are very useful.

A good classification of the types of criticisms of IAMs can be found in the Annex III on Scenarios and Modelling Method s from the abovementioned 6th Assessment Report of the IPCC, which divides IAM commentary into four categories (IPCC 2022a , 1862). The first type of criticism is the literature dealing with features and dynamics which are either missing from IAMs or modeled in ways which are perceived to be unfeasible or incredible. The second is a set of concerns around the complexity and comprehensibility of IAMs and their results. The third is a range of critiques about the lack of social, institutional and political elements within IAMs, and fourth is an array of worries about the effects IAMs themselves have on limiting climate policy options.

The first category of literature is the largest, as every parameter, assumption, and model structure is fair game for criticism of being unrealistic or of missing some crucial element. Of particular importance are the assumptions about the development of the costs of particular technologies and the availability of technologies which are currently unproven at large scales (Way et al. 2022 ). As will be discussed in the next section in greater detail, the macroeconomic assumptions within the models are also grounds for criticism (Asefi-Najafabady et al. 2020 ; Pollitt and Mercure 2018 ; Cattan and McIsaac 2021 ; Riahi et al. 2022 , 359).

In terms of complexity, the massive size and scope of most IAMs have raised concerns of a “black box” problem in which results cannot be clearly explained by any identifiable model features (Skea et al. 2021 ). The issue of complexity is compounded by a lack of transparency of data and code on the part of some models. This opacity means that when considering the results from large sets of models, as is the case in the work of the IPCC, distinctions between results driven by empirics and results driven by theoretical choices can be substantially blurred.

The lack of social and institutional considerations within IAMs may be one of the more surprising features of the models for those not familiar with them, as the scenarios created by the models seamlessly couple dramatic, unprecedented technological transformations with an essentially unchanging global pollical economy (Cherp et al. 2018 ; Jewell and Cherp 2020 ). While social dynamics and political change are notoriously hard to quantify and project, the dissonance between the scale of change allowed in some areas of the models and the rigidity of others is striking.

This leads to the final and most fundamental point that IAMs themselves may play a role in closing off doors and “pushing society in certain directions” without proper democratic consent or scientific justification (IPCC 2022a , 1862). Being omitted from IAM scenarios does not mean something has been proven impossible, but omission does have a chilling effect in removing options from the broader policy debate (Gambhir 2019 ). This critique raises the worry that IAMs are formally cutting off exploration in any direction that requires a structural change to underlying socio-economic systems, and, in so doing, are artificially closing off paths towards better worlds.

Heterodox economics’ contributions to IAMs: concepts, applications, and methods

For the purpose of this paper, heterodox economics will be considered to be the field of economic research which does not rely on the neoclassical foundations of methodological individualism, optimization, and equilibrium analysis (Arnsperger and Varoufakis 2006 ; Earle et al. 2016 ). This includes a wide range of different sub-fields and schools of thought which are both complementary and sometimes contradictory towards each other. Taken together, the broader range of theoretical and methodological starting points contained within heterodox economics provides an inherently expansive view of the possible, allowing for both brighter futures and darker dangers than what is described in the comparatively tranquil world of neoclassical economics. The section will attempt to map some of the potential contributions of heterodox economics in expanding the possibilities allowed within integrated assessment models.

Outlining the contours of heterodox economics, even in the simplest terms, brings a danger of information overload. To better organize the specific ways in which the stock of heterodox knowledge can be used, the paper proposes a classification based on how any given idea could be applied to integrated assessment modeling. At the highest level are conceptual contributions , which are key ideas implying deep, structural changes to existing IAMs. A list of conceptual contributions is shown in Table ​ Table2. 2 . The applicability of these concepts is then expanded upon with an extensive list of indicative examples of how each concept could be applied to a specific topic related to climate-economy modeling in Table ​ Table3. 3 . Cutting across the broad concepts and the narrow examples are methodological techniques which can augment or replace the equilibrium modeling which is currently standard IAMs. These methodological contributions are detailed in Table ​ Table4 4 .

Potential conceptual contributions to IAM modeling from the various heterodox schools of economic thought

a Path dependency is also closely associated with Post-Keynesian economics.

Descriptions of heterodox concepts and potential applications to integrated assessment modeling

Methodologies associated with heterodox economics relevant for integrated assessment modeling

Author’s elaboration, modeling frameworks adapted from Hafner et al. ( 2020 )

The concepts presented in Table ​ Table2 2 cover some of the “big ideas” from heterodox economics. These ideas are more than just topical interests, but instead are different ways of looking at the economy. Each highlights a feature of the economic system which, if emphasized, leads to very different lines of research and analysis. Each concept is further subdivided by the school of economic thought they are most closely associated with, with the specific schools of thought adapted from Fischer et al. ( 2018 ). While invoking schools of thought is always fraught with the danger of over-simplification, it is hoped that this further subdivision will help clarify the ideas in question. While the concepts cover a wide range, they were selected for their potential applicability to climate-economy modeling and are not intended to fully cover the contributions of heterodox economics more generally. The objective of identifying these concepts is to allow for clearer discussion of the sorts of stories which could be readily built using the building blocks provided by heterodox economics, a task which will be expanded upon in Sect.  4 .

To provide context for this list of concepts, a short description of each and examples of how each could be applied to integrated assessment modeling is provided in Table ​ Table3. 3 . These examples are indicative of the scope of specific interventions which are open to heterodox modelers, and range from those which are straightforwardly implementable (i.e., incorporating extreme climate damage functions or introducing composite wellbeing indicators within IAMs) to those which would require the creation of entirely new climate-economy models. Most of the proposals are compatible with one another, and taken together, they represent a path towards formally synthesizing insights from various schools of heterodox economics.

Finally, Table ​ Table4 4 outlines various research methods which are directly applicable to creating and using emission pathway models. The methodological contributions are divided by the nature of their potential use, with primary modeling techniques being separated from supporting methods. Short descriptions and references to examples are given for each. Compared to the list of concepts, the range of methods is narrower, with priority given to the techniques which are already in use. In particular, the list of modeling frameworks draws directly from the model types reviewed by Hafner et al. ( 2020 ).

The concepts, applications, and methods presented in this section will be illustrated further in the following section, where they will be used to tell the stories of various potential climate futures.

Telling new stories with heterodox concepts

To enable easier comparison across models, the IAM community has collaborated to create a set of common narratives which depict potential pathways for the world’s political-economic development over the coming century. These stories, called the Shared Socioeconomic Pathways 1 (SSPs) provide specific background inputs for population, urbanization, education, and GDP growth for five different global scenarios and are used widely in the modeling community (Riahi et al. 2017 ; O’Neill et al. 2017 ). These sets of inputs are each categorized according to the degree to which they make either mitigating or adapting to climate change easier or more difficult. This creates a matrix of scenarios detailing the various options of overall low challenges, overall high challenges, low challenges for mitigation but difficult adaptation, and finally high challenges for mitigation but low obstacles to adaptation (Kriegler et al. 2012 ; O’Neill et al. 2014 ).

As an example of how heterodox concepts can be put to use, this section will now propose a similar framework of socioeconomic background scenarios which could serve as starting points for modeling projects. Rather than organizing the scenarios along the axes of mitigation and adaptation, we propose a categorization on the basis of the levels of economic growth and institutional change in each storyline. This classification allows us to more systematically explore fundamental changes to both political-economic structures and the underlying growth path of the economy, two features which are not readily treated in the existing IAM literature. Figure  1 depicts the five scenarios detailed in this section, arranged approximately along the beforementioned axes.

Climate-economy pathways organized by levels of growth and institutional change (author’s elaboration)

Building off of the heterodox concepts listed in Sect.  3 , each scenario also highlights a number of concepts which would be particularly important for modeling the pathway. While a large number of the concepts are fully compatible with each other and should be considered in any scenario built on heterodox foundations, the concepts identified as particularly relevant are those which would likely need to be explicitly modeled in a formal representation of each particular scenario. Each scenario will also be linked with examples of methods which could be readily applied to it, with preferences given to references to existing work where possible. The remainder of the paper will detail the pathways in Fig.  1 , starting from a narrative description of each scenario.

Bumpy Green Boulevard

Particularly relevant concepts: effective demand, bio-physical embeddedness

Countries around the world embrace the environmental transition as an opportunity to fight climate change while boosting sluggish post COVID-19 economies. This ‘green growth’ strategy initially pays off, as green investments spark an economic boom which keeps workers employed and demand strong. Unfortunately, as the transition is truly getting off the ground, the global economy starts to run up against hard limits to energy, material and land availability. These limits slow not only the transition, but economic activity more generally, as countries struggle against each other to find enough inputs to maintain growth.

In this story, the concepts of effective demand and biophysical embeddedness are emphasized to tell a cautionary tale about potential non-economic limits to the speed of the transition. In a standard neoclassical IAMs this story would look quite different. Firstly, the large-scale green investment campaigns would not be met with a spike in growth due to increased aggregate demand, but would rather be fully crowded out by reductions in investments elsewhere in the economy. Furthermore, as the green investments are only being made because of a policy intervention, they would be assumed to be less productive than whatever was crowded out, meaning the long-term growth potential of the economy would be somewhat lower. Secondly, while standard IAMs can and do track the amount of energy, materials and land associated with various pathways, they do not typically use these features to impose binding limits on either sectoral or economy-wide growth.

In terms of actually modeling this story, a very similar scenario has already been created using the MEDEAS World model (Capellán-Pérez et al. 2020 ; Nieto et al. 2020 ). Within MEDEAS, the economy is represented as demand-led, with an input–output framework providing insights about how demand is distributed across the various sectors of the economy. As a system dynamics model, MEDEAS also includes hard energy availability feedbacks which prevent desired demand from being fully fulfilled unless the energy submodule is able to generate a sufficient amount of energy. In similar scenarios in MEDEAS to the story presented above, deployment of new renewable energy infrastructures is unable to keep up with the quick pace of “green growth,” leading to a relative scarcity of fossil fuels and unintentional near-zero growth rates (Nieto et al. 2020 ).

Comparable demand-led growth effects also exist in macroeconometric models, although so far without an emphasis on energy limits (Pollitt and Mercure 2018 ; Mercure et al. 2019 ). Along with full integration into heterodox IAMs, the concepts of effective demand and bio-physical limits can also be applied in ad hoc ways to equilibrium models by testing their results under significantly higher growth paths and by conducting feasibility analyses of the levels of material and energy inputs required at various points in a given scenario.

Slow and stable street

Particularly relevant concepts: social metabolism, wellbeing, and endogenous money

After a nasty set of energy crises in the early 2020s, the countries of the European Union decide to stop pursuing economic growth as a policy goal and instead target a broader index of wellbeing. While the shift in goals is certainly radical, it leaves the fundamental structure of Europe’s economy largely in place. This leads to some financial difficulties, particularly concerning public debts. To overcome these challenges, international financial institutions are forced to adapt, creating a more flexible financial regime for both Global North and Global South alike.

By combining a reduction in the rate of social metabolism with a focus on wellbeing, this story describes a path characterized more by a slowing of environmental pressures than a mad dash of technological deployment. The scenario is enhanced by a detailed examination of what this slowing means for the financial system and public finances, each of which could become problematic as credit endogenously contracts alongside the slowing economy. In principle, the slowing of growth could be explored with existing IAMs by simply inputting a desired growth path which converges near zero. This, however, would miss the complications a lack of growth would cause for the financial system and public finances, features which are not readily included within standard equilibrium IAMs.

Versions of this story have been a key starting point for a number of heterodox modeling exercises, with Jackson and Victor ( 2020 ) and Dafermos et al. ( 2017 ) doing so in a stock flow consistent modeling framework and D’Alessandro et al. ( 2020 ) with a system dynamics model. Key insights to come out of this work include the macroeconomic feasibility of such a path and a warning about the role public debt in particular may play as economic activity plateaus or contracts. The possibility of integrating wellbeing as a target within modeling exercise has also been shown, for example in Jackson and Victor ( 2020 ) who track a “sustainable prosperity index” and in the “average wellbeing index” of the Earth4All system dynamics model (Dixson-Declève et al. 2022 ). The concepts of social metabolism and wellbeing are also good starting points to further analyze the question of global justice during the ecological transition (Rubiano Rivadeneira and Carton 2022 ).

Science fiction freeway

Particularly relevant concepts: creative destruction, path dependency, and heterogenous agents

Recognizing the difficulties of honoring the 1.5-degree limit with existing technology, a core group of countries enter into an International Innovation Club. Membership in the club requires large public funding of green research and development and mandates that all results are shared openly. By coordinating and expanding the world’s knowledge creation, the Club manages to shock the world, introducing new techniques and technology which dramatically reshape the direction of the transition. Old problems are replaced with new however, as the solutions to the climate crisis put pressures on other ecological systems, and new inequalities arise between member and non-member countries.

Current IAMs typically rely on specific sets of individual technologies for their projections. This makes sense in the near term: it is fairly unlikely that something no one has ever heard of will be a major player in the transition over the next decade. In the longer term it is less clear, as if history is any guide, the types and levels of technology in 2100 will likely be quite different than today. Capitalism has a powerful capacity to create, especially under specific institutional and legal conditions which allow for coordination and cooperation. Combined with the notion of deep path dependency, a concerted effort to alter our technological path could potentially take us places that are currently difficult to imagine.

In terms of modeling, what is needed to better tell this story is a more explicit representation of technological change. This should certainly include possibilities for the refinement of existing technologies (Way et al. 2022 ), but ideally would also include space for new tools to emerge based on the needs displayed in a given scenario. A promising path forward could be with agent-based models, which allow the differentiation between innovative and static actors and the comparison of various knowledge-sharing regimes. Agent-based models have already been used extensively to study innovation and technology, and have recently been combined with climate modules to create IAMs (Dosi et al. 2010 ; Lamperti et al. 2018 , 2020 ). A further step could be to build modules depicting state-led innovation programs to be integrated as policy options within larger IAMs. The models could also explore the implications of various technological paths for development and international wealth distribution.

Path to perdition

Particularly relevant concepts: Institutional embeddedness, social reproduction, and fundamental uncertainty

The horrors of climate change, which had always seemed distant, arrive with a fury in the 2030s. While the direct damage from not-so-natural disasters are substantial, the more serious issues come from the gradual breakdown of political and social institutions, as democracies become less democratic and the rule of law routinely fails. Things which were once taken for granted, like public educational and health systems, become fragile or non-existent, shifting burdens once shouldered by the state on to families and local communities. The old distinctions between developing and developed countries fade, as new divisions arise between failed and functioning societies. While the global economy continues to muddle through the chaos, it is a shadow of it’s early 21 st century peak.

Most emission pathway IAMs are designed to better understand how society can limit global warming. This makes them somewhat utopian, as in both their construction and the bulk of their scenarios, they are exploring some of the brightest possible futures. More work could be done in exploring the other side of the bell curve, in trying to understand what could happen if we fail. Here, the concepts of institutional embeddedness and social reproduction could be very useful for understanding how things turn from bad to worse should the social and institutional pillars holding up market economies falter. The recognition of the often-overlooked prerequisites of our economic systems, along with an honest appraisal of the fundamental limits to our abilities to know what is around the corner, allow for the telling of a much more sober story than what is implied by measuring the effects of shocks within an equilibrium framework.

Heterodox scholars have already extensively criticized existing efforts to estimate potential climate damages (Keen 2020 ; Woillez et al. 2020 ; Asefi-Najafabady et al. 2020 ). A new challenge would be to construct an alternative modeling framework that examines not just climate changes’ effect on productivity or growth in a given year, but its cumulative effect on political, institutional, and social systems. Of particular importance would be recognizing the impact of climate change on activities like care work which often take place outside of markets but are essential for supporting market economies (Pearse 2017 ; Eastin 2018 ). This line of modeling would also allow space for international comparisons of institutional resilience.

By identifying possible tipping points and subsequent chain reactions, this line of modeling could provide a more complex and detailed pictures of what a warming world could look like. This would be useful not only as a warning in the here and now, but also as an improvement to the internal logic of the IAMs themselves, as the addition of social and institutional loops would force actors within the modeled world to face clear and severe consequences if they decide to shirk on mitigation.

Rue de Révolution

Particularly relevant concepts: power and economic democracy

What starts as a protest movement grows into something bigger, as wide swaths of civil society come together to demand something different. Starting from the periphery of the global economy and spreading country by country towards the core, the result is an economy transformed from below, with massive global corporations replaced by local and regional cooperatives, and the rule of the free market replaced with democratic planning. The economy is transformed, but ecological challenges remain as the leaders of the new system struggle to balance environmental concerns with the material interests of the people who they serve.

Standard climate-economy models explore a world in which the technology that underlays our economy changes dramatically, but the fundamental structure of the economy, and the broader society it supports remain essentially the same. Not only is this not the only possibility, but it also seems a fairly unlikely one. Social upheaval and revolution are a core part of the story of the first Industrial Revolution, and it remains entirely possible that something comparable could accompany an ecological transition. Power is a clear conceptual building block for analyzing societal transformations, and when combined with the idea of economic democracy, one can start to see the broad shape of a very different economic system.

Modeling this new system, the transition that creates it, and its interaction with the core environmental and technical challenges of decarbonization, is a tall task, which to the author’s knowledge has not been fully embraced by any large-scale integrated modeling projects. At the macro level, system dynamics modeling could be flexible enough to accommodate entirely different political-economic systems within the same model, with social tipping points endogenously pushing countries from one system to another, while at the micro level, an agent-based representation could simulate the social processes which lead to system changes. Perhaps a concrete way forward would be through participatory modeling, in which non-modelers build detailed descriptions of existing and potential systems that modelers then attempt to formalize. A set of such formalized alternative economic systems then could serve as a kind of post-capitalist Shared Socioeconomic Pathways, providing common end points to reconstruct within the various heterodox IAMs.

Conclusions: the role of heterodox economics in expanding the possible

The previous section shows that the concepts and methods of heterodox economics could be used to tell different stories than those which are currently told by neoclassical integrated assessment models. The final task then is to assess whether telling these additional stories would actually be an improvement to the landscape of climate-economy modeling. To approach this assessment, it is helpful to recall the typology of common criticisms against IAMs presented in the 6th IPCC Assessment Report and summarized in Sect.  2 , which included criticisms of IAMs for (1) having missing or incorrect assumptions, (2) being overly complicated and unclear, (3) lacking social and institutional consideration, and (4) for being used to close doors to unmodeled possibilities.

On the first count, of adding and substituting assumptions, heterodox economics has much to contribute, as elaborated in many of the applications shown in Table ​ Table3. 3 . In terms of substituting existing assumptions, one concept that stands out is effective demand, which can literally turn the economics of IAMs on its head by flipping losses from mitigation into gains. In terms of new assumptions to be added, the bio-physical embeddedness of the economy is a clear priority, as current models lack even damages from climate change, let alone interactions and limits coming from other physical and ecological systems.

For the criticism of the opacity of IAMs, the contribution of heterodox economics is less clear. If anything, the long list of new complexities suggested by a heterodox analysis has the effect of increasing, not decreasing, how complicated new IAMs would need to be. Especially when attempting to formalize multiple concepts within the same model structure, there is a real danger of losing track of the effect of any given assumption to the larger picture. Similarly, when trying to model large, systemic shifts in one part of a model there is a possibility that the nuances of other parts of the model will be overwhelmed. The additional complexity called for by heterodox modeling also brings with it serious technical challenges for actually building and running quantitative models which can convincingly represent real world systems. This balance between realism and complexity is a key challenge for potential heterodox IAMs.

For the criticisms that IAMs need stronger social and institutional contextualization heterodox economics again has a clear contribution to make, with a number of entire schools of thought dedicated to analyzing the broader societal context within which economies operate.

But it is in the critique that IAMs should be used in ways that do not artificially close off viable policy options, in which perhaps the strongest argument for involving heterodox economics in integrated assessment modeling emerges. No economic theory or methodology can describe every reality or every possibility. As such, a plurality of perspectives and tools are needed to have a true sense of what the future may have in store for us. The concepts and techniques used within heterodox economics can be used to describe and explore scenarios which are currently impossible in neoclassical climate-economy models yet remain entirely plausible in the real world. This suggests a strong and persistent role for heterodox ideas and heterodox scholars in building, adapting, and improving emission pathway scenarios and the models which create them.

Not every story can or should be told through formal, quantitative models. But more stories, and more stories which are considered extreme, must be told if humanity hopes to achieve its climate goals as laid out in the 2015 Paris Agreement.

Author contribution

The sole author was responsible for all aspects of creating the paper, with support and advice from two PhD supervisors and two anonymous reviewers.

Open access funding provided by Università degli Studi Roma Tre within the CRUI-CARE Agreement. No specific funding was received for the creation of this paper. The author receives a research stipend from the University of Technology of Compiègne.

Data availability

Declarations.

There are no ethical considerations in publishing the paper.

The authors declare no competing interests.

1 For reference, the names given to the five shared socioeconomic pathways (SSPs) are (1) Sustainability — Taking the Green Road; (2) Middle of the Road; (3) Regional Rivalry — A Rocky Road; (4) Inequality — A Road Divided; and (5) Fossil-fueled Development — Taking the Highway.

• Arnsperger C, Varoufakis Y. What is neoclassical economics? The three axioms responsible for its theoretical oeuvre, practical irrelevance and thus, discursive power. Panoeconomicus. 2006; 53 (1):5–18. doi: 10.2298/PAN0601005A. [ CrossRef ] [ Google Scholar ]
• Asefi-Najafabady S, Villegas-Ortiz L, Morgan J. The failure of integrated assessment models as a response to ‘climate emergency’ and ecological breakdown: the emperor has no clothes. Globalizations. 2020; 7 :1–11. doi: 10.1080/14747731.2020.1853958. [ CrossRef ] [ Google Scholar ]
• Capellán-Pérez I, de Blas I, Nieto J, de Castro C, Miguel LJ, Carpintero Ó, Mediavilla M, et al. MEDEAS: a new modeling framework integrating global biophysical and socioeconomic constraints. Energy Environ Sci. 2020; 13 (3):986–1017. doi: 10.1039/C9EE02627D. [ CrossRef ] [ Google Scholar ]
• Cattan R, McIsaac F. A macroeconomic critique of integrated assessment environmental models: the case of Brazil. Rev Keynes Econ. 2021; 9 (2):204–231. doi: 10.4337/roke.2021.02.03. [ CrossRef ] [ Google Scholar ]
• Cherp A, Vinichenko V, Jewell J, Brutschin E, Sovacool B. Integrating techno-economic, socio-technical and political perspectives on national energy transitions: a meta-theoretical framework. Energy Res Soc Sci. 2018; 37 :175–190. doi: 10.1016/j.erss.2017.09.015. [ CrossRef ] [ Google Scholar ]
• Czupryna M, Franzke C, Hokamp S, Scheffran J. An agent-based approach to integrated assessment modelling of climate change. J Artif Soc Soc Simul. 2020; 23 (3):7. doi: 10.18564/jasss.4325. [ CrossRef ] [ Google Scholar ]
• D’Alessandro S, Cieplinski A, Distefano T, Dittmer K. Feasible alternatives to green growth. Nature Sustainability. 2020; 3 (4):329–335. doi: 10.1038/s41893-020-0484-y. [ CrossRef ] [ Google Scholar ]
• Dafermos Y, Nikolaidi M, Galanis G. A stock-flow-fund ecological macroeconomic model. Ecol Econ. 2017; 131 :191–207. doi: 10.1016/j.ecolecon.2016.08.013. [ CrossRef ] [ Google Scholar ]
• Dixson-Declève S, Gaffney O, Ghosh J, Randers J, Rockström J, Stoknes PE (2022) Earth for all : a survival guide for humanity : a report to the Club of Rome (2022), fifty years after The limits of growth (1972). New Society Publishers, Gabriola Island, Canada
• Dolter B. Greening the Saskatchewan grid: a case study in deliberative energy modelling. Ecological Economics. 2021; 183 :106966. doi: 10.1016/j.ecolecon.2021.106966. [ CrossRef ] [ Google Scholar ]
• Dosi G, Fagiolo G, Roventini A. Schumpeter meeting Keynes: a policy-friendly model of endogenous growth and business cycles. J Econ Dyn Control. 2010; 34 (9):1748–1767. doi: 10.1016/j.jedc.2010.06.018. [ CrossRef ] [ Google Scholar ]
• Doukas H, Nikas A. Decision support models in climate policy. Eur J Oper Res. 2020; 280 (1):1–24. doi: 10.1016/j.ejor.2019.01.017. [ CrossRef ] [ Google Scholar ]
• Doukas H, Nikas A, González-Eguino M, Arto I, Anger-Kraavi A. From integrated to integrative: delivering on the Paris Agreement. Sustainability. 2018; 10 (7):2299. doi: 10.3390/su10072299. [ CrossRef ] [ Google Scholar ]
• Earle J, Moran C, Ward-Perkins Z. The econocracy: the perils of leaving economics to the experts. Manchester: Manchester University Press; 2016. [ Google Scholar ]
• Eastin J. Climate change and gender equality in developing states. World Dev. 2018; 107 (July):289–305. doi: 10.1016/j.worlddev.2018.02.021. [ CrossRef ] [ Google Scholar ]
• Fischer L, Hasell J, Proctor JC, Uwakwe D, Ward Perkins Z, Watson C (eds) (2018) Rethinking economics: an introduction to pluralist economics. Routledge, Taylor & Francis Group, London, New York
• Gambhir A. Planning a low-carbon energy transition: what can and can’t the models tell us? Joule. 2019; 3 (8):1795–1798. doi: 10.1016/j.joule.2019.07.016. [ CrossRef ] [ Google Scholar ]
• Gambhir A, Butnar I, Li P-H, Smith P, Strachan N. A review of criticisms of integrated assessment models and proposed approaches to address these, through the lens of BECCS. Energies. 2019; 12 (9):1747. doi: 10.3390/en12091747. [ CrossRef ] [ Google Scholar ]
• Glanemann N, Willner SN, Levermann A. Paris Climate Agreement passes the cost-benefit test. Nat Commun. 2020; 11 (1):110. doi: 10.1038/s41467-019-13961-1. [ PMC free article ] [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Hafner S, Anger-Kraavi A, Monasterolo I, Jones A. Emergence of new economics energy transition models: a review. Ecol Econ. 2020; 177 :106779. doi: 10.1016/j.ecolecon.2020.106779. [ CrossRef ] [ Google Scholar ]
• Hänsel MC, Drupp MA, Johansson DJA, Nesje F, Azar C, Freeman MC, Groom B, Sterner T. Climate economics support for the UN climate targets. Nat Clim Chang. 2020; 10 (8):781–789. doi: 10.1038/s41558-020-0833-x. [ CrossRef ] [ Google Scholar ]
• IPCC (2018) Global warming of 1.5°C. An IPCC special report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty. Edited by Valérie Masson-Delmotte, Hans-Otto Pörtner, Jim Skea, Panmao Zhai, Debra Roberts, Priyadarshi R Shukla, Anna Pirani, et al. In Press
• IPCC (2022a) Annex III: scenarios and modelling methods. In Climate change 2022: mitigation of climate change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change
• IPCC (2022b) Summary for policymakers. In Climate change 2022: mitigation of climate change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change
• IRENA . Global renewables outlook: energy transformation 2050. Abu Dhabi: International Renewable Energy Agency; 2020. [ Google Scholar ]
• Jackson T, Victor P (2020) The transition to a sustainable prosperity-a stock-flow-consistent ecological macroeconomic model for Canada. Ecol Econ 177:106787. 10.1016/j.ecolecon.2020.106787
• Jewell J, Cherp A (2020) On the political feasibility of climate change mitigation pathways: is it too late to keep warming below 15°C?. WIREs Climate Change 11(1). 10.1002/wcc.621
• Jones NA, Perez P, Measham TG, Kelly GJ, d’Aquino P, Daniell KA, Dray A, Ferrand N. Evaluating participatory modeling: developing a framework for cross-case analysis. Environ Manage. 2009; 44 (6):1180–1195. doi: 10.1007/s00267-009-9391-8. [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Keen S (2020) The appallingly bad neoclassical economics of climate change. Globalizations, September, pp 1–29. 10.1080/14747731.2020.1807856
• Keppo Ilkka, Isabela Butnar, Nicolas Bauer, Matteo Caspani, Oreane Edelenbosch, Johannes Emmerling, Panagiotis Fragkos et al (2021) Exploring the possibility space: taking stock of the diverse capabilities and gaps in integrated assessment models. Environ Res Lett. 10.1088/1748-9326/abe5d8
• Köberle AC, Vandyck T, Guivarch C, Macaluso N, Bosetti V, Gambhir A, Tavoni M, Rogelj J. The cost of mitigation revisited. Nat Clim Chang. 2021; 11 (12):1035–1045. doi: 10.1038/s41558-021-01203-6. [ CrossRef ] [ Google Scholar ]
• Krey V, Guo F, Kolp P, Zhou W, Schaeffer R, Awasthy A, Bertram C, et al. Looking under the hood: a comparison of techno-economic assumptions across national and global integrated assessment models. Energy. 2019; 172 :1254–1267. doi: 10.1016/j.energy.2018.12.131. [ CrossRef ] [ Google Scholar ]
• Kriegler E, O’Neill BC, Hallegatte S, Kram T, Lempert RJ, Moss RH, Wilbanks T. The need for and use of socio-economic scenarios for climate change analysis: a new approach based on shared socio-economic pathways. Glob Environ Chang. 2012; 22 (4):807–822. doi: 10.1016/j.gloenvcha.2012.05.005. [ CrossRef ] [ Google Scholar ]
• Lamperti F, Roventini A. Beyond climate economics orthodoxy: impacts and policies in the agent-based integrated-assessment DSK model. Eur J Econ Econ Policies: Interv. 2022; 19 (3):357–380. doi: 10.4337/ejeep.2022.0096. [ CrossRef ] [ Google Scholar ]
• Lamperti F, Dosi G, Napoletano M, Roventini A, Sapio A. Faraway, so close: coupled climate and economic dynamics in an agent-based integrated assessment model. Ecol Econ. 2018; 150 :315–339. doi: 10.1016/j.ecolecon.2018.03.023. [ CrossRef ] [ Google Scholar ]
• Lamperti F, Dosi G, Napoletano M, Roventini A, Sapio A (2020) Climate change and green transitions in an agent-based integrated assessment model. Technol Forecast Soc Chang 153. 10.1016/j.techfore.2019.119806
• Lehr U, Lutz C (2019) Macro-econometric and structural models. In: Soytaş U, Sarı R (eds) Routledge handbook of energy economics, 1st ed. Routledge, pp 473–81. 10.4324/9781315459653-34
• Matsumoto K, Fujimori S (2019) CGE models in energy economics. In: Soytaş U, Sarı R (eds) Routledge handbook of energy economics, 1st ed. Routledge, pp 433–45. 10.4324/9781315459653-31
• McCollum DL, Gambhir A, Rogelj J, Wilson C. Energy modellers should explore extremes more systematically in scenarios. Nat Energy. 2020; 5 (2):104–107. doi: 10.1038/s41560-020-0555-3. [ CrossRef ] [ Google Scholar ]
• Meadows DH, Meadows DL, Randers J, Behrens III WW. The limits to growth. New York: Universe Books; 1972. [ Google Scholar ]
• Mercure J-F, Pollitt H, Edwards NR, Holden PB, Chewpreecha U, Salas P, Lam A, Knobloch F, Vinuales JE. Environmental impact assessment for climate change policy with the simulation-based integrated assessment model E3ME-FTT-GENIE. Energ Strat Rev. 2018; 20 :195–208. doi: 10.1016/j.esr.2018.03.003. [ CrossRef ] [ Google Scholar ]
• Mercure J-F, Knobloch F, Pollitt H, Leonidas Paroussos S, Scrieciu S, Lewney R. Modelling innovation and the macroeconomics of low-carbon transitions: theory, perspectives and practical use. Climate Policy. 2019; 19 (8):1019–1037. doi: 10.1080/14693062.2019.1617665. [ CrossRef ] [ Google Scholar ]
• Monasterolo I, Raberto M. The EIRIN flow-of-funds behavioural model of green fiscal policies and green sovereign bonds. Ecol Econ. 2018; 144 :228–243. doi: 10.1016/j.ecolecon.2017.07.029. [ CrossRef ] [ Google Scholar ]
• Nieto J, Carpintero Ó, Miguel LJ, de Blas I. Macroeconomic modelling under energy constraints: global low carbon transition scenarios. Energy Policy. 2020; 137 :111090. doi: 10.1016/j.enpol.2019.111090. [ CrossRef ] [ Google Scholar ]
• Nieto J, Moyano PB, Moyano D, Miguel LJ. Is energy intensity a driver of structural change? Empirical evidence from the global economy. J Ind Ecol. 2023; 27 (1):283–296. doi: 10.1111/jiec.13352. [ CrossRef ] [ Google Scholar ]
• Nordhaus W (1993) Optimal greenhouse-gas reductions and tax policy in the ‘DICE’ model. Am Econ Rev 83(2):313–317
• Nikas A, Doukas H, Papandreou A (2019) A detailed overview and consistent classification of climate-economy models. In: Doukas H, Flamos A, Lieu J (eds) Understanding risks and uncertainties in energy and climate policy: multidisciplinary methods and tools for a low carbon society. Springer International Publishing, Cham
• Nordhaus W (1992) The ‘DICE’ model: background and structure of a dynamic integrated climate-economy model of the economics of global warming. 1009. Cowles Foundation Discussion Papers. Cowles Foundation Discussion Papers. Cowles Foundation for Research in Economics, Yale University. https://ideas.repec.org/p/cwl/cwldpp/1009.html
• O’Neill BC, Kriegler E, Riahi K, Ebi KL, Hallegatte S, Carter TR, Mathur R, van Vuuren DP. A new scenario framework for climate change research: the concept of shared socioeconomic pathways. Clim Change. 2014; 122 (3):387–400. doi: 10.1007/s10584-013-0905-2. [ CrossRef ] [ Google Scholar ]
• O’Neill BC, Kriegler E, Ebi KL, Kemp-Benedict E, Riahi K, Rothman DS, van Ruijven BJ, et al. The roads ahead: narratives for shared socioeconomic pathways describing world futures in the 21st century. Glob Environ Chang. 2017; 42 :169–180. doi: 10.1016/j.gloenvcha.-. [ CrossRef ] [ Google Scholar ]
• Pearse R. Gender and climate change. WIREs Climate Change. 2017; 8 (2):e451. doi: 10.1002/wcc.451. [ CrossRef ] [ Google Scholar ]
• Pollitt H, Mercure JF. The role of money and the financial sector in energy-economy models used for assessing climate and energy policy. Climate Policy. 2018; 18 (2):184–197. doi: 10.1080/14693062.2016.1277685. [ CrossRef ] [ Google Scholar ]
• Riahi K, van Vuuren DP, Kriegler E, Edmonds J, O’Neill BC, Fujimori S, Bauer N, et al. The shared socioeconomic pathways and their energy, land use, and greenhouse gas emissions implications: an overview. Glob Environ Chang. 2017; 42 :153–168. doi: 10.1016/j.gloenvcha.2016.05.009. [ CrossRef ] [ Google Scholar ]
• Riahi K, Schaeffer R, Arango J, Calvin K, Hasegawa T, Jiang K, Kriegler E et al (2022) Mitigation pathways compatible with long-term goals. In Climate change 2022: mitigation of climate change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change, by IPCC. Cambridge University Press
• Rubiano NR, Carton W. (In)justice in modelled climate futures: a review of integrated assessment modelling critiques through a justice lens. Energy Res Soc Sci. 2022; 92 :102781. doi: 10.1016/j.erss.2022.102781. [ CrossRef ] [ Google Scholar ]
• Skea J, Shukla P, Al Khourdajie A, McCollum D. Intergovernmental Panel on Climate Change: transparency and integrated assessment modeling. WIREs Climate Change. 2021; 12 (5):727. doi: 10.1002/wcc.727. [ CrossRef ] [ Google Scholar ]
• Sognnaes I, Gambhir A, van de Ven D-J, Nikas A, Anger-Kraavi A, Bui Ha, Campagnolo L, et al. A multi-model analysis of long-term emissions and warming implications of current mitigation efforts. Nat Clim Chang. 2021; 11 (12):1055–1062. doi: 10.1038/s41558-021-01206-3. [ CrossRef ] [ Google Scholar ]
• Süsser D, Ceglarz A, Gaschnig H, Stavrakas V, Flamos A, Giannakidis G, Lilliestam J. Model-based policymaking or policy-based modelling? How energy models and energy policy interact. Energy Res Soc Sci. 2021; 75 :101984. doi: 10.1016/j.erss.2021.101984. [ CrossRef ] [ Google Scholar ]
• Way R, Ives MC, Mealy P, Doyne Farmer J. Empirically grounded technology forecasts and the energy transition. Joule. 2022; 6 (9):2057–2082. doi: 10.1016/j.joule.2022.08.009. [ CrossRef ] [ Google Scholar ]
• Woillez MN, Giraud G, Godin A. Economic impacts of a glacial period: a thought experiment to assess the disconnect between econometrics and climate sciences. Earth Syst Dynamics. 2020; 11 (4):1073–1087. doi: 10.5194/esd-11-1073-2020. [ CrossRef ] [ Google Scholar ]

Why Do We Dislike Inflation?

This paper provides new evidence on a long-standing question asked by Shiller (1997): Why do we dislike inflation? I conducted two surveys on representative samples of the US population to elicit people’s perceptions about the impacts of inflation and their reactions to it. The predominant reason for people’s aversion to inflation is the widespread belief that it diminishes their buying power, as neither personal nor general wage increases seem to match the pace of rising prices. As a result, respondents report having to make costly adjustments in their budgets and behaviors, especially among lower-income groups. Inflation also provokes stress, emotional responses, and a sense of inequity, as the wages of high-income individuals are perceived to grow more rapidly amidst inflation. Many respondents believe that firms have considerable discretion in setting wages, opting not to raise them in order to boost profits, rather than being compelled by market dynamics. The potential positive associations of inflation, such as with reduced unemployment or enhanced economic activity, are typically not recognized by respondents. Inflation ranks high in priority among various economic and social issues, with respondents blaming the government and businesses for it. I also highlight a substantial polarization in attitudes towards inflation along partisan lines, as well as across income groups.

This is an earlier version of the paper prepared for the Spring 2024 Brookings Papers on Economic Activity (BPEA) conference and the final version of this paper will be published in the Spring 2024 BPEA issue. I thank Carola Binder, Janice Eberly, Yuriy Gorodnichenko, Francesco Nuzzi, and Jon Steinsson for helpful comments and feedback. I am deeply grateful to Alberto Binetti, Filippo Giorgis, and Alfonso Merendino for excellent research assistance. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.

MARC RIS BibTeΧ

Download Citation Data

Working Groups

More from nber.

In addition to working papers , the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter , the NBER Digest , the Bulletin on Retirement and Disability , the Bulletin on Health , and the Bulletin on Entrepreneurship  — as well as online conference reports , video lectures , and interviews .

The Creativity Decline: Evidence from US Patents

Working Paper 2024-008A by Aakash Kalyani

Economists have long struggled to understand why aggregate productivity growth has dropped in recent decades while the number of new patents filed has steadily increased. I offer an explanation for this puzzling divergence: the creativity embodied in US patents has dropped dramatically over time. To separate creative from derivative patents, I develop a novel, text-based measure of patent creativity: the share of technical terminology that did not appear in previous patents. I show that only creative and not derivative patents are associated with significant improvements in firm level productivity. Using the measure, I show that inventors on average file creative patents upon entry, and file derivative patents with more experience. I embed this life-cycle of creativity in a growth model with endogenous creation and imitation of technologies. In this model, falling population growth explains 27% of the observed decline in patent creativity, 30% of the slowdown in productivity growth, and 64% of the increase in patenting.

Read Full Text

https://doi.org/10.20955/wp.2024.008

• Subscribe to Our Newsletter

Related Links

• Economist Pages
• JEL Classification System
• Fed In Print

SUBSCRIBE TO THE RESEARCH DIVISION NEWSLETTER

Research division.

• Legal and Privacy

One Federal Reserve Bank Plaza St. Louis, MO 63102

Information for Visitors