Chapter 6: Macroeconomic policies and environmental sustainability
Macroeconomic policies affect the rate of economic activity and therefore the usage rates of our natural resource base. Through the impact on key variables and prices, macroeconomic policies are capable of bringing about deep structural economy-wide transformations, determining the patterns of income distribution in a society, conditioning the dynamics of investment and thus the introduction of new technologies and the creation of new jobs in any economy. These policies also condition output composition and technology choice, influencing production and marketing strategies, as well as resource management capabilities of all agents, from the largest and most powerful industrial corporations, to the smallest agricultural units. These economy-wide policies also affect asset composition of any investment portfolio, bringing about important changes in the way in which financial instruments interact with productive activities in the real sectors of the economy. In view of the relation between financial variables and commodities prices in the world’s mercantile exchanges and futures markets, this is a very important aspect of relations between the financial sector and the environment.
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