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The DEFINE (Dynamic Ecosystem-FINance-Economy) framework is an ecological stock-flow consistent (E-SFC) modelling framework that analyses the interactions between the ecosystem, the financial system and the macroeconomy. It aims at examining economic policies and strategies that can allow our societies to live within the biophysical limits of a finite planet.

DEFINE draws on the post-Keynesian and ecological economics tradition. It combines the stock-flow consistent approach developed by Godley and Lavoie with the flow-fund model of Georgescu-Roegen. By doing so it provides an integrated approach to the combined analysis of physical and monetary stocks and flows. The model incorporates explicitly the laws of thermodynamics, the effects of emissions on temperature, climate damages, the waste generation process, the endogeneity of money and the impact of finance on economic activity.

The DEFINE modelling framework is used to generate scenarios about the environmental crisis and its macrofinancial implications. It is also used to evaluate the effects of various types of environmental policies and strategies, paying particular attention to the role of finance.

There are three categories of DEFINE models:

  1. The DEFINE-GLOBAL model which is a large-scale model for the global economy and the global ecosystem. 

  2. The country-specific DEFINE models that are large-scale models whose structure reflects the features of specific economies. So far, this category includes the DEFINE-UK model as well as the DEFINE-ALBANIA and the DEFINE-PHILIPPINES models that are under development.

  3. The simplified DEFINE models that are small-scale or medium-scale models that focus on specific elements of the economy or the ecosystem, assuming away interactions with other elements. The simplified DEFINE models are components of the large-scale DEFINE model and are particularly useful for educational purposes. So far, this category includes DEFINE-SIMPLE, DEFINE-CLIMATE and DEFINE-MATTER. Although these models have been calibrated using global data, they can also be calibrated using country-specific data.