From ecological macroeconomics to a theory of endogenous money for a finite planet

This paper takes stock of the achievements and gaps of the emerging field of ecological macroeconomics, which has brought insights from specific schools of macroeconomics—most notably post-Keynesian—to ecological economics, with a strong emphasis on the endogeneity of money. Ecological macroeconomics has proposed fiscal, monetary and prudential reforms to boost ‘green’ investments, and developed new modeling frameworks to explore the interactions between the financial, macroeconomic and biophysical spheres. While these proposals open a broader range of possibilities to engage in a socio-ecological transition than those offered by the current paradigm of a financialized global economy, they paradoxically suffer from similar limitations. By placing much faith in ‘green’ investments, they impose a vision of the transition that presents strong technical and institutional limitations. The field also fails to revisit its own understanding of macroeconomics and of specific phenomena— e.g. financial instability—through a biophysical lens, in spite of increasing transdisciplinary evidence supporting this approach. We suggest overcoming these limitations through institutionalist perspectives that understand money as a language through which value is created and legitimized. Those perspectives seem essential to re-embed the governance of money within a worldview that acknowledges the finiteness and incommensurable values of Earth's life support systems.