Blog Roll: Steady-State Economies

 

For much of Modern History, a Steady-State Economy (see definition below and video above) is thought of as a system state that might or might not happen at some point in the future. The history of the concept is basically that Classical Economists thought (reasonably) that economies would eventually become stationary. Neoclassical Economists, starting in the 20th Century, assume that, as a practical matter, monetized economies can grow forever, given unlimited Technological change. In the Late 20th Century, Ecological Economists viewed the economy as embedded in a Finite Natural System creating a Limit to Economic Growth.

What is missing from this Theoretical History of of the World-System are economies that are in a demonstrable steady state. For that, we need models and Systems Theory provides general models that can be used for this purpose. Neoclassical Economic models confuses Economic Stagnation with a Steady-State Economy Stagnation is a short-run condition while the steady-state is a long-run position of systems with certain characteristics, essentially system stability. Neoclassical economic models do not have enough feedback loops to create long-run stability.

This Blog Roll presents statistically estimated models of Steady-State Economic systems:

• A Steady-State Economy for Germany  The German economy has basically been in a steady state since 2010. Commentators keep mischaracterizing the steady state as growth stagnation.
• Western Europe: Growth and Collapse? Growth peaked sometime before 2016.
• A Steady-State Economy for Israel A stabilized model does not reach a steady state until 2150.
• A Steady State for Italy The economy has essentially been in a steady state since the turn of the Century.
• US Steady State or Collapse The US economy is predicted to reach a peak in 2060. Is this a threat to the World-System?
• World System Steady State and Collapse The World System is predicted to peak in 2060.
• IPCC Scenarios all predict growth and collapse.
• Portugal's Poor Performing Economy Actually heading for a steady state.

Notes

Wikipedia Links

• Steady-State Economy an economy made up of a constant stock of physical wealth (capital) and a constant population size. In effect, such an economy does not grow in the course of time.
• Classical Economists a school of thought in political economy that flourished, primarily in Britain, in the late 18th and early-to-mid 19th century. 
• Neoclassical Economists an approach to economics in which the production, consumption, and valuation (pricing) of goods and services are observed as driven by the supply and demand model.
• Ecological Economists a transdisciplinary and an interdisciplinary field of academic research addressing the interdependence and coevolution of human economies and natural ecosystems, both intertemporally and spatially.
• Finite Natural System all biotic and abiotic things occurring naturally, meaning in this case not artificial.
• Limits to Economic Growth the possibility of exponential economic and population growth with a finite supply of resources, studied by computer simulation.
• World-System a socioeconomic system, under systems theory, that encompasses part or all of the globe, detailing the aggregate structural result of the sum of the interactions between polities. 
• Systems Theory the transdisciplinary study of systems, i.e., cohesive groups of interrelated, interdependent components that can be natural or artificial.
• Economic Stagnation a prolonged period of slow economic growth, typically measured in GDP per capita growth or median income growth, which is usually accompanied by high unemployment. Under some definitions, slow means significantly slower than potential growth as estimated by macroeconomists, even though the growth rate may be nominally higher than in other countries not experiencing economic stagnation.
• System Stability the stability of solutions of differential equations and of trajectories of dynamical systems under small perturbations of initial conditions.