PhD Project: The ecological limits to economic growth and macroeconomic stability: a post-Keynesian perspective
Valeria Jiménez (HWR Berlin; IPE Berlin)
Supervisors: Prof. Eckhard Hein, HWR Berlin; Prof. Dany Lang, Université Sorbonne Paris Nord
Economic activities put severe pressure on planetary boundaries, and as these pressures increase, so do the risks of human perturbations destabilizing the earth system at a global scale. Regarding climate change, meeting the Paris Agreement becomes a bigger challenge each passing year and there is a consensus that only a system-wide transformation will make it possible to meet these ambitious, yet crucial targets. These concerns have increased the academic and public policy debates regarding the socio-ecological transition and the wide range of climate policies needed to achieve the targets mentioned.
Two contrasting narratives found in academic debates are green growth and degrowth. Green growth advocates defend that economic growth is tightly linked to progress, well-being, and innovation, and therefore finding ways to align growth with our environmental goals is the only way to achieve a successful green transition. Degrowth advocates on the other hand, reject that more growth is needed to improve quality of life, especially in the Global North, and argue in favour of a just transition beyond growth. One of their a main arguments is that the current levels of decoupling of economic growth from negative environmental impacts are far too low to make the reduction in throughput compatible with ever-expanding economies. Hence, at the current state of technology, a growing economy still relies on more energy demand and resource use, making a rapid transition harder to achieve.
The urgency of the socio-ecological transition and the data backing up the degrowth advocates highlight the importance of improving our understanding of post-growth economies. Within this context, this dissertation, takes a post-Keynesian perspective and explores the conditions under which the overall macroeconomic stability of a zero-growth economy (ZGE) can be sustained by addressing questions such as:
- Can zero growth be consistent with positive profits and a positive interest rate?
- Is it possible to maintain the macroeconomic stability in the goods market, and the financial market in a ZGE? If so, what conditions must be fulfilled?
- Is a stable labor market in the sense of a stable employment rate possible in a ZGE? Are labor market interventions necessary?
- What role does structural change play in the socio-ecological transition and how could it help us maintain macreoconomic stability?