This paper presents a post-Keynesian ecological macro model that combines three strands of literature: the directed technological change mechanism developed in mainstream endogenous growth theory models, the ecological economic literature which highlights the role of green innovation and material flows, and the post-Keynesian school which provides a framework to deal with the demand side of the economy, financial flows, and inter- and intra-sectoral behavioral interactions. The model is stock-flow consistent and introduces research and development (R&D) as a component of GDP funded by private firm investment and public expenditure. The economy uses three complimentary inputs - Labor, Capital, and (non-renewable) Resources. Input productivities depend on R&D expenditures, which are determined by relative changes in their respective prices. Two policy experiments are tested; a Resource tax increase, and an increase in the share of public R&D on Resources. Model results show that policy instruments that are continually increased over a long-time horizon have better chances of achieving a "green" transition than one-of climate policy shocks to the system, that primarily have a short-run affect. / Series: Ecological Economic Papers

This dissertation consists of three independent essays. The first essay, “Long Waves and Short Cycles in a Model of Endogenous Financial Fragility,” presents a stock flow consistent macroeconomic model in which financial fragility in firm and household sectors evolves endogenously through the interaction between real and financial sectors. Changes in firms’ and households’ financial practices produce long waves. The Hopf bifurcation theorem is applied to clarify the conditions for the existence of limit cycles, and simulations illustrate stable limit cycles. The long waves are characterized by periodic economic crises following long expansions. Short cycles, generated by the interaction between effective demand and labor market dynamics, fluctuate around the long waves. The second essay,“Macroeconomic Implications of Financialization,” examines macroeconomic effects of changes in firms’ financial behavior (retention policy, equity financing, debt financing), and household saving and portfolio decisions using models that pay explicit attention to financial stock-flow relations. Unlike the first essay, the second essay focuses on the effects of financial change on steady growth path. The results are insensitive to the precise specification of household saving behavior but depend critically on the labor market assumptions (labor-constrained vs dual) and the specification of the investment function (Harrodian vs stagnationist). The last essay, “Finance, Sectoral Structure and the Big Push,” studies the role of finance in the presence of investment complementarities using a big push model. Due to complementarities between different investment projects, simultaneous industrialization of many sectors (big push) may be needed for an underdeveloped economy to escape from an underdevelopment trap. Such simultaneous industrialization requires costly coordination by a third party, such as the government. Some recent papers show that private banks with significant market power may also solve the problem of coordination failure. We show that private coordination may not work since even large private banks may find it more profitable to finance firms in the traditional sector than in the modern sector.