Abstract
<title>Abstract</title> <p>This paper develops a Green Stock-Flow Consistent (G-SFC) macroeconomic model tailored to the structural features of Algeria, an open economy characterised by deep hydrocarbon dependence, a nascent renewable energy sector, and persistent unemployment. Building on the canonical GodleyLavoie stock- ow-consistent framework and the ecological extensions of Dafermos, Nikolaidi, and Galanis, we integrate a carbon taxation mechanism, a sovereign green investment fund, and a renewable energy sector into a coherent multi-sectoral accounting struc ture for the period 20052025. The model captures energy substitution dynamics, productivity spillovers from green capital accumulation, labour market adjustment, and external balance constraints speci c to hydrocarbon-exporting economies. We calibrate the model using annual data from the World Bank, the International Energy Agency, the Banque d’AlgØrie, and the O ce National des Statistiques, and subject it to ve policy simulations: (i) carbon tax intro duction, (ii) fossil fuel subsidy removal, (iii) accelerated solar investment, (iv) a green industrial policy package, and (v) green bond nancing. Simulation results suggest that a phased car bon tax combined with targeted renewable investment can generate medium-run diversi cation gains, employment creation, and reduced external vulnerability, albeit at the cost of short-run in ationary pressure. The paper contributes a novel country-level G-SFC application for the MENA region and o ers quantitative guidance for Algeria’s ongoing energy transition strategy. JEL Classication: E12; E17; O13; Q43; Q48; Q54; O55</p>