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Post Keynesian and Ecological Economics

Post Keynesian and Ecological Economics

Confronting Environmental Issues

Edited by Richard P.F. Holt, Steven Pressman and Clive L. Spash

It is argued that mainstream economics, with its present methodological approach, is limited in its ability to analyze and develop adequate public policy to deal with current environmental problems and sustainable development. This book provides an alternative approach. Building on the strengths and insights of Post Keynesian and ecological economics and incorporating cutting edge work in such areas as economic complexity, bounded rationality and socio-economic dynamics, the contributors to this book provide a trans-disciplinary approach to deal with a broad range of environmental concerns.

Chapter 11: Theoretical and Policy Issues in Complex Post Keynesian Ecological Economics

J. Barkley Rosser Jr

Subjects: economics and finance, environmental economics, post-keynesian economics, environment, environmental economics


J. Barkley Rosser, Jr INTRODUCTION Post Keynesian economics contains competing approaches (King, 2002). One group draws on Keynes (1936) to emphasize the role of fundamental uncertainty in economics, that which cannot be characterized by a known probability distribution (Davidson, 1982–83, 1994). Another focuses more on specific models of macroeconomic dynamics, or macrodynamics, often relying upon non-linear relations in the economy that can lead to complex endogenous fluctuations. This group often looks to the work of Kalecki (1935, 1971) for its inspiration, although such figures as Kaldor (1940), Goodwin (1951) and even Hicks (1950) played important roles in its development. I (Rosser, 2006) have proposed that the fact that each of these approaches draws partly from, or has influenced the perspective of complex economic dynamics, may provide some degree of unity in the conflicts between these schools. Complexity underlies uncertainty, which deeply drives the policy issues, which becomes especially clear for the case of the most dramatic of ecological economics issues, that of global warming (Spath, 2002). This chapter extends this argument, with the focus now being more specifically on ecological economic systems and their forms of dynamic complexity. On the one hand foundational ideas of dynamic complexity have arisen from the study of ecological systems. On the other, the interlinkages of ecological with economic systems can be seen to be a special source of complex dynamics in the combined systems. An example of an idea from ecology that directly influenced macrodynamic theory is that of the predator–prey model,...

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