As Cambridge Econometrics’ macroeconometric model, E3ME, just passed its 25th birthday, Chief Economist Hector Pollitt discusses some roots of the model and the relevance of Michał Kalecki’s work to its theoretical underpinnings.
A theory is a short cut for remembering informat…
Commissioned by the Swiss Federal Office of Energy (SFOE), Cambridge Econometrics worked together with the Swiss Paul Scherrer Institute (PSI) to study the link between energy pricing and the energy consumption of electricity and natural gas in Switzerland. Dora Fazekas explains …
Cambridge Econometrics recently coproduced a series of reports on the ‘Circular Economy in the EU-Africa Cooperation’ for the European Commission’s DG Environment. Part of Cambridge Econometrics’ contribution included analysis using FRAMES, a new modelling tool developed …
Cambridge Econometrics is involved in analysing the potential of Green Recovery in various projects including work for the We Mean Business coalition and the UN Partnership for Action on Green Economy. As a part of this endeavour, we also carried out an analysis of potential of G…
Cambridge Econometrics and E3M have recently done modelling for the European Commission DG Energy exploring how policy conclusions differ if the same set of scenarios are estimated with two different models: E3ME and GEM-E3-FiT. This kind of exercise could be problematic. If the …
A recent paper written by the economist Steve Keen has been causing a storm on Twitter. It is called ‘The appallingly bad neoclassical economics of climate change’ (see also here). The paper takes aim at the small-scale ‘Integrated Assessment Models’ that have in the past…
Cambridge Econometrics recently worked with the Cambridge Institute for Sustainability Leadership to look at the effect of climate neutrality on jobs and skills in Europe. As part of this effort FTT:Steel, a recently developed novel sub-module of CE’s E3ME model, has been used …
Global GDP: we currently project the COVID-19 pandemic will reduce global GDP by 5% below a no-virus baseline in 2020 and 2021
Private indebtedness: the impacts on private indebtedness suggest that the subsequent recovery will be slow: while pre-crisis growth rates are restored, the lost level of GDP is not made up (a similar profile to what followed the Great Recession)
Government action: to mitigate those impacts further, governments will need to scale up the socialisation of private debt (through direct subsidy) and not merely ensure that liquidity is provided
In my studies I will be exploring how theories of complexity can be connected to post-Keynesian economics and, ultimately, Cambridge Econometrics’ E3ME model. Like any new student, my first task is a big pile of reading. Near the top of the pile is a return to Keynes’ General Theory.
The General Theory was written a long time before modern theories of complexity were developed. However, there are not really glaring inconsistencies or incompatibilities in the text.
It is true that Keynes does mention equilibrium a lot (something regarded as a lifeless planet by complexity scientists) but usually in the sense of something dynamic that the economy moves towards, rather than attains (p343).
In September 2019 our latest book, Energy, Environmental and Economic Sustainability in East Asia, was published. It presents the results of our recent research with the REEPS network of environmental and ecological economists in East Asia.
Our analysis highlights some of the key challenges and suggests some potential solutions.
It almost goes without saying that East Asia will play a critical role in future global sustainability. Even leaving aside the sheer size of China, the region accounts for a large and growing share of total emissions and resource use. However, the region is far from homogenous, with each of the four countries we focus on (China, Japan, Korea and Taiwan) facing its own unique environmental and political challenges.