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Prosperity Matters

What can prosperity possibly mean in a world of environmental, social and economic limits?—We work with people, policy and business to address this question, developing pragmatic steps towards a shared and lasting prosperity.

About CUSP

Low Grow SFC: A stock-flow consistent ecological macroeconomic model for Canada

System dynamics model by Tim Jackson and Peter Victor, developing sustainable prosperity scenarios for the Canadian economy out to 2067. A CUSP working paper is outlining LowGrow SFC and various scenarios in detail. Desktop users can explore the model in the embedded online beta version below, or go directly to the ISEE page. For background about our system dynamics work, please see the project page.

LowGrow SFC: An ecological macroeconomic simulation model by Tim Jackson and Peter Victor
Image: The MONIAC (Monetary National Income Analogue Computer) also known as the Phillips Hydraulic Computer or Financephalograph, modelling the national economic processes of the UK (1949, William Phillips) / Wiki Commons


Difficulties viewing the model? Please try the ISEE website directly for a full-screen view.

Since the end of the second world war, most countries have pursued economic growth as their top economic policy objective. Economic growth has brought enormous benefits to many people, especially those living in high income countries. However, it is increasingly obvious that the benefits of growth have not been equally shared. Far from it. Income and wealth inequality is on the rise and some of the economic growth in high income countries has come at the expense of poorer parts of the world. With accumulating evidence of environmental degradation, social disruption and population displacement, and with declining confidence in governments and corporations to deliver a good life for all, we need to choose the future we want rather than accept the disturbing consequences of current trends.

The first step is to imagine different possibilities. This is not easy. We need to start from where we are and to ground the alternatives in real data. To help do this Tim Jackson and Peter Victor have created a computer model of an economy that encompasses economic, environmental, energy, social and financial considerations. LowGrow SFC incorporates many features developed over several years of collaboration and brings together: 1) the environmental and resource constraints on economic activity; 2) a full account of production, consumption, employment and public finances in the ‘real economy’ at the level of the nation state; 3) a comprehensive account of the financial economy, including the main interactions between financial agents. The model is of a single high income country which happens to be Canada. Alternative futures derived from the model are likely to be similar for other advanced economies.

Three scenarios generated with the model describe alternative futures for Canada from 2017 to 2067. One scenario is a base case which is essentially a projection of the past into the future. The second scenario introduces a vigorous program of greenhouse gas reduction. The third scenario builds on the second by adding more environmental, social and economic measures that combine to provide sustainable prosperity. The scenarios are not predictions of what will happen, but an exploration of possibilities. Interested readers can explore the implications for themselves in the online beta version of LowGrow SFC.

About

LowGrow SFC is part of a suite of system dynamics models developed by Tim Jackson and Peter Victor, including SIGMA, which addresses the key challenge of inequality in the context of declining growth rates; and FALSTAFF, which explores the financial and economic dimensions of a post-growth economy.

The CUSP working paper No 16 is outlining LowGrow SFC in detail. The scenarios are developed in the recently published journal paper: The Transition to a Sustainable Prosperity (Ecological Economics, Vol 177).

RELATED PUBLICATIONS

Jackson, T and P Victor 2020. The Transition to a Sustainable Prosperity-A Stock-Flow-Consistent Ecological Macroeconomic Model for Canada. Ecological Economics, Vol 177.

Jackson T and P Victor 2019. Unravelling the claims for (and against) green growth. Science, 366 (6468): 950-951.

Victor, P 2019. Managing Without Growth—Slower by Design, Not Disaster. Edward Elgar.

Jackson, T 2018: The Post-Growth Challenge: Secular Stagnation, Inequality and the Limits to Growth. Ecological Economics, 156: 236–246.

Jackson, T 2017. Prosperity Without Growth—Foundations for the Economy of Tomorrow. Routledge.

Jackson, T, Victor, P and A Asjad Naqvi 2016. Towards a Stock – Flow Consistent Ecological Macroeconomics. WWW for Europe: Work Package 205, Milestone 40 “Report on model results including additional policies to counter averse effects“. Working Paper no 114.

Jackson, T and P Victor 2016. Does slow growth lead to rising inequality? Some theoretical reflections and numerical simulations. Ecological Economics, 121: 206–219.

Jackson, T and P Victor 2015. Does credit create a growth imperative? A quasi-steady state economy with interest-bearing debt. Ecological Economics, 120: 32–48.

FURTHER READING

This paper presents a stock-flow consistent (SFC) macroeconomic simulation model for Canada. Contrary to the widely accepted view, the results suggest that ‘green growth’ (in the Carbon Reduction Scenario) may be slower than ‘brown growth’. More importantly, we show (in the Sustainable Prosperity Scenario) that improved environmental and social outcomes are possible even as the growth rate declines to zero.
This paper presents a stock-flow consistent (SFC) macroeconomic simulation model for Canada. Contrary to the widely accepted view, the results suggest that ‘green growth’ (in the Carbon Reduction Scenario) may be slower than ‘brown growth’. More importantly, we show (in the Sustainable Prosperity Scenario) that improved environmental and social outcomes are possible even as the growth rate declines to zero.
Economy
Finance
System Dynamics
July 24, 2020
The SIGMA model explores the hypothesis that slow growth rates lead to rising inequality. Contrary to the general hypothesis, the work finds that inequality does not necessarily increase as growth slows down. In fact, there are certain conditions under which inequality can be ameliorated significantly, or even entirely eliminated, as growth declines.
The SIGMA model explores the hypothesis that slow growth rates lead to rising inequality. Contrary to the general hypothesis, the work finds that inequality does not necessarily increase as growth slows down. In fact, there are certain conditions under which inequality can be ameliorated significantly, or even entirely eliminated, as growth declines.
Economy
System Dynamics
January 3, 2016
Global economic stability could be difficult to recover in the wake of the Covid-19, this Nature article finds. Even before the Covid-19 crisis, many of the world’s leading economies were experiencing larger slower growth cycles (recession cycles), suggesting precisely such a period of critical slowing down in the economic system. This analysis suggests that the added weight of the Covid-19 crisis may result in one of the weakest and most unstable recoveries in recorded history for many economies.
Global economic stability could be difficult to recover in the wake of the Covid-19, this Nature article finds. Even before the Covid-19 crisis, many of the world’s leading economies were experiencing larger slower growth cycles (recession cycles), suggesting precisely such a period of critical slowing down in the economic system. This analysis suggests that the added weight of the Covid-19 crisis may result in one of the weakest and most unstable recoveries in recorded history for many economies.
Economy
System Dynamics
June 26, 2020
It is clear that the larger the economy becomes, the more difficult it is to decouple that growth from its material impacts... This isn't to suggest that decoupling itself is either unnecessary or impossible. On the contrary, decoupling well-being from material throughput is vital if societies are to deliver a more sustainable prosperity—for people and for the planet. (This article is posted on the Science website).
It is clear that the larger the economy becomes, the more difficult it is to decouple that growth from its material impacts... This isn't to suggest that decoupling itself is either unnecessary or impossible. On the contrary, decoupling well-being from material throughput is vital if societies are to deliver a more sustainable prosperity—for people and for the planet. (This article is posted on the Science website).
Economy
System Dynamics
November 26, 2019
The challenges facing the world and the UK today are unprecedented. A global health emergency, a global climate crisis; and a catastrophic loss of biodiversity, are undermining the basis for future prosperity in the UK and across the world. This article, written for The New York Times in 2012, speaks to the theme of restoring the value of decent work to its rightful place at the heart of society.
The challenges facing the world and the UK today are unprecedented. A global health emergency, a global climate crisis; and a catastrophic loss of biodiversity, are undermining the basis for future prosperity in the UK and across the world. This article, written for The New York Times in 2012, speaks to the theme of restoring the value of decent work to its rightful place at the heart of society.
Arts
Economy
Health
Politics & Enterprise
Society
System Dynamics
March 26, 2020
We often hear that it’s the journey and not the destination that really matters. Nowhere is this truer than when thinking about climate change. In this blog, CUSP co-investigator Peter Victor is introducing his illustrative carbon budget simulator, that can be used to explore different approaches to achieving an emissions target and remaining within a target budget. (This blog was updated on 30 March 2020 to include an addendum on the Corona crisis.)
We often hear that it’s the journey and not the destination that really matters. Nowhere is this truer than when thinking about climate change. In this blog, CUSP co-investigator Peter Victor is introducing his illustrative carbon budget simulator, that can be used to explore different approaches to achieving an emissions target and remaining within a target budget. (This blog was updated on 30 March 2020 to include an addendum on the Corona crisis.)
System Dynamics
March 12, 2020
This working paper presents a stock-flow consistent (SFC) simulation model of a national economy, calibrated on the basis of Canadian data. LowGrow SFC describes the evolution of the Canadian economy in terms of six financial sectors whose behaviour is based on ‘stylised facts’ in the Post-Keynesian tradition. Contrary to the accepted wisdom, the results indicate the feasibility of improved environmental and social outcomes, even as the growth rate declines to zero.
This working paper presents a stock-flow consistent (SFC) simulation model of a national economy, calibrated on the basis of Canadian data. LowGrow SFC describes the evolution of the Canadian economy in terms of six financial sectors whose behaviour is based on ‘stylised facts’ in the Post-Keynesian tradition. Contrary to the accepted wisdom, the results indicate the feasibility of improved environmental and social outcomes, even as the growth rate declines to zero.
Economy
System Dynamics
November 19, 2019
Sluggish recovery in the wake of the financial crisis has revived discussion of a ‘secular stagnation’. These conditions have been blamed for rising inequality and political instability. Tim Jackson contests this view, pointing instead to a steadfast refusal to address the ‘post-growth challenge’.
Sluggish recovery in the wake of the financial crisis has revived discussion of a ‘secular stagnation’. These conditions have been blamed for rising inequality and political instability. Tim Jackson contests this view, pointing instead to a steadfast refusal to address the ‘post-growth challenge’.
Economy
Health
Politics & Enterprise
System Dynamics
May 13, 2018
Taken together, the suite of system dynamics models developed by Tim Jackson et al represent the first steps in constructing a new macro-economic synthesis capable of exploring the economic and financial dimensions of an economy confronting resource or environmental constraints.
Taken together, the suite of system dynamics models developed by Tim Jackson et al represent the first steps in constructing a new macro-economic synthesis capable of exploring the economic and financial dimensions of an economy confronting resource or environmental constraints.
System Dynamics
April 6, 2016
Confronting inequality in a post-growth world – basic income, factor substitution and the future of work
Confronting inequality in a post-growth world – basic income, factor substitution and the future of work
Economy
System Dynamics
April 17, 2018
The publication of Prosperity without Growth was a landmark in the sustainability debate. This substantially revised and re-written edition updates its arguments and considerably expands upon them. Tim Jackson demonstrates that building a ‘post-growth’ economy is not Utopia—it's a precise, definable and meaningful task. It’s about taking simple steps towards an economics fit for purpose.
The publication of Prosperity without Growth was a landmark in the sustainability debate. This substantially revised and re-written edition updates its arguments and considerably expands upon them. Tim Jackson demonstrates that building a ‘post-growth’ economy is not Utopia—it's a precise, definable and meaningful task. It’s about taking simple steps towards an economics fit for purpose.
Economy
Finance
Health
Nature of Prosperity
Philosophy
Politics & Enterprise
Society
System Dynamics
April 27, 2017
Revised second edition of Peter Victor's influential book. Human economies are overwhelming the regenerative capacity of the planet, this book explains why long-term economic growth is infeasible, and why, especially in advanced economies, it is also undesirable. Simulations developed with Tim Jackson, show that managing without growth is a better alternative.
Revised second edition of Peter Victor's influential book. Human economies are overwhelming the regenerative capacity of the planet, this book explains why long-term economic growth is infeasible, and why, especially in advanced economies, it is also undesirable. Simulations developed with Tim Jackson, show that managing without growth is a better alternative.
Economy
System Dynamics
January 22, 2019
Funded by the ESRC’s Rebuilding Macroeconomics network, the broad aim of this project is to develop an agent-based, stock-flow consistent macro-economic model capable of addressing the risks (and opportunities) associated with the transition to a net-zero carbon economy. The project combines elements from economics, finance and physics, as well as a number of sub-disciplines within each of these areas.
Funded by the ESRC’s Rebuilding Macroeconomics network, the broad aim of this project is to develop an agent-based, stock-flow consistent macro-economic model capable of addressing the risks (and opportunities) associated with the transition to a net-zero carbon economy. The project combines elements from economics, finance and physics, as well as a number of sub-disciplines within each of these areas.
Economy
System Dynamics
June 30, 2019