This policy calls for greater pluralism in macroeconomic modelling, moving beyond the reliance on Computable General Equilibrium (CGE) and Dynamic Stochastic General Equilibrium (DSGE) models that continue to dominate in international institutions’ modelling toolboxes.
While such models have been influential in policy analysis, they embody restrictive assumptions — such as perfect markets and automatic return to equilibrium — that limit their ability to capture distributional dynamics, financial instability, and ecological constraints. In contrast, a range of ecological and post-growth macroeconomic approaches, including Stock–Flow Consistent (SFC) models, Agent-Based Models (ABM), Environmentally Extended Input–Output (EEIO) frameworks, and integrated assessment models such as EUROGREEN, GEMMES, and Earth4All, offer complementary perspectives. These approaches are better equipped to account for systemic crises, non-linear dynamics, and feedback loops between the economy, society, and the environment, and they provide tools for analysing how fiscal and monetary policies can advance wellbeing and sustainability objectives.
Implementation requires strengthening statistical and institutional capacity, encouraging pluralist model use in central banks and finance ministries, and ensuring that global institutions systematically draw on diverse modelling frameworks.
The aim is to broaden the analytical toolbox available to policymakers so that advice is more robust, forward-looking, and aligned with the goals of poverty eradication, social justice, and ecological sustainability.
