Self-study
P1
Recently, a new school of economics called steady-state economics has seriously challenged neoclassical economics, the reigning school in Western economic decision making. ███
Intro topic ·
Steady-state economics (new view) vs. neoclassical economics (traditional view)
Neoclassical view ·
Economy is closed system between producers and consumers
Growth is necessary and unlimited
P2
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Steady-state view ·
Economy is open system dependent on nature
Neoclassical view is wrong; not a closed system. Resources enter system, waste leaves.
Implications ·
of steady-state view
Growth is neither necessary nor unlimited. Economy has optimal size in theory. Too much growth is dangerous because it depletes resources and creates waste.
Neoclassical rebuttal ·
Natural resources can be replaced if depleted
P3
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problem ·
according to steady-state view
Western economies have exceeded optimal size
Solution ·
according to steady-state view
Meet human wants without growth, e.g. by using resources more efficiently
Passage Style
Critique or debate
19.
In the view of steady-state ███████████ █████ ███ ██ ███ █████████ ██ █
a
the total amount ██ █████ █████
Unsupported. Steady-state economists do not cite the amount of human wants as a factor that limits economic growth. Instead, they think that nature is what limits growth.
b
the index of ███████████████ ███████████ ██████
Unsupported. This index is a measurement of how much the economy can grow within the constraints of nature; this index itself is not a limitation on growth, it just tells us how much growth is possible.
c
the capacity of ██████ ██ ██████ █████
These constraints of nature are the noneconomic factors that the steady-state economists
d
the problems associated ████ ████████ ██████
Unsupported. Steady-state economists do not reference the problems associated with economic growth as a factor that limits how much the economy can grow. Instead, they think that nature is what limits growth.
e
the possibility of ████████ ██████████
Unsupported. Steady-state economists do not reference the possibility of stagnation as a factor that limits economic growth. Instead, they think that nature is what limits growth.