Date: Tuesday, 10 March 2026, at 12:15 pm
Venue: Room Bruguier Pacini, DEM
Speaker: Liam Mc Court, University of Siena
Title: Demand-led growth in the Anthropocene: a long-run model of conflict inflation and climate damage
Abstract:
The destabilisation of the climate system is bound to have increasingly profound effects on societies and political economies. Currently, this takes the form of both shorter-term occurrences such as extreme weather events, floods, wildfires, extreme heat, droughts, and longer term shifts in the Earth system such as sea level rise and shifts in weather patterns. Economic systems react to destabilisation in complex ways, but one key mechanism through which they do so is price-changes and, hence, inflation. The fact that inflationary shocks have distributional effects is well documented. Yet, the interaction between climate change, inflation, and distribution is underexplored in economic literature. This paper aims to fill this gap, and underline how inflation is an important channel through which climate damage feeds into the macroeconomy. A Post-Keynesian Conflict Inflation Model is embedded into an Ecological Macroeconomics framework, incorporating climate feed-in effects such as capital destruction, capital depreciation, labour force shocks, climate-induced worker productivity losses, and price shock to systemically significant prices. The growth process of the economy is demand-led. However, supply plays an active role, and may be disrupted by climate related-dynamics. Inflationary pressures arise as a consequence, and see a distributional struggle play out between different classes. Ultimately, who bears most of the brunt of the shocks is determined by the structural power of social classes.