The precarious situation of a world economy that has outgrown the planet’s capacity, while still failing to universally meet human needs has led to a search for new and alternative economic paradigms. Photo: Cambodia, P.I. Network/Flickr

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ECONOMIC SYSTEMS

In search of a more sustainable economic system

Researchers offer four alternatives to mainstream economics that fail to meet the needs and aspirations of both people and the planet

Story highlights

  • Mainstream economics fails to guide the pursuit of meeting human needs while staying within the planetary boundaries
  • Academics are rethinking the economic system to find alternatives
  • Alternative approaches such as Post-Keynesian economics, Critical Institutions economics, Ecological economics and System Dynamics can offer insights for new economic paradigms

FALLING SHORT: Today’s societies are simultaneously failing to meet the needs and aspirations of current generations and causing ecological problems that risk harming future generations.

Academics are rethinking the current economic system and offering alternatives to the neoclassical economics that has been the dominating perspective.

In an article published as part of Elsevier's Reference Module in Earth Systems and Environmental Sciences, centre PhD student David Collste reviews four alternative economic approaches.

Criticism against modern mainstream economics is not new, and there are many approaches that deserve attention. Insights from alternative approaches can help us explore new territory and pathways out of both ecological degradation and injustices in society.

David Collste, author

Finding ways forward

In the article Collste takes a closer look at Post-Keynesian economics, Critical Institutional economics, Ecological economics and System Dynamics.

He summarizes a few key contributions from each approach:

  • Post-Keynesian economics pinpoints the need to consider deep uncertainty and the possibility of governments to intervene in the economy
  • Ecological economics sets the ecological and biophysical frame within which human development has to take place
  • Institutional economics offers critical analyses to examine how institutions affect human behaviour and how human behaviour feeds back on institutions
  • System dynamics offers practical tools to critically examine the coherence of different perspectives and explore what-if scenarios by simulation.

Alternative paradigms

The precarious situation of a world economy that has outgrown the planet’s capacity, while still failing to universally meet human needs has led to a search for new and alternative economic paradigms.

Collste concludes that "these approaches can provide complementary insights to the problem of unmet human needs and environmental degradation. They each address areas where mainstream economics currently fall short."

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Topics: Economics

Citation

Collste, D. 2020. New economic paradigms. Reference Module in Earth Systems and Environmental Sciences. DOI: 10.1016/B978-0-12-409548-9.12446-7

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David Collste's PhD research focuses on integrated modeling for the implementation of the 2030 Agenda as part of the EU-funded ‘Adaptation to a New Economic Reality’ project.

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