POSTED: October 17, 2018
Economy | Politics & Organisations | System Dynamics

The Post-Growth Challenge: Secular Stagnation, Inequality and the Limits to Growth

Journal Paper by Tim Jackson
Ecological Economics, Vol 156
February 2019

The Post-growth Challenge: Secular Stagnation, Inequality and the Limits to Growth | Journal Paper by Tim Jackson
CC.0 :: Joel Huegli / Pixabay.com

Abstract

Critics have long questioned the feasibility (and desirability) of exponential growth on a finite planet. More recently, mainstream economists have begun to suggest some ‘secular’ limits to growth. Declining growth rates have in their turn been identified as instrumental in increased inequality and the rise of political populism. This paper explores these emerging arguments paying a particular attention to the dynamics of secular stagnation. It examines the underlying phenomenon of declining labour productivity growth and unpacks the close relationships between productivity growth, the wage rate and social inequality. It also points to the historical congruence (and potential causal links) between declining productivity growth and resource bottlenecks. Contrary to some mainstream views, this paper finds no inevitability in the rising inequality that has haunted advanced economies in recent decades, suggesting instead that it lies in the pursuit of growth at all costs, even in the face of challenging fundamentals. This strategy has hindered technological innovation, reinforced inequality and exacerbated financial instability. At the very least, this paper argues, it is now time for policy to consider seriously the possibility that low growth rates might be ‘the new normal’ and to address carefully the ‘post-growth challenge’ this poses.

The article can be accessed via the Science Direct website. Should you have difficulties accessing the paper, please email us for a copy. An earlier draft of the article was published as CUSP Working Paper No 12, available in open access.

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