Macroeconomics Versus Environmental‐Macroeconomics

15 Pages Posted: 22 Jun 2012

Date Written: July 2012

Abstract

When environmental macroeconomic frameworks replace standard macroeconomic frameworks differences in policy outcomes ensue. The non‐recognition of real environmental capacity constraints could explain the inability of standard frameworks to deliver on certain macroeconomic goals. Herein, environmental capital depreciation is internalised into analytic frameworks of factor utilisation, aggregate demand and aggregate supply. The analyses reveal that restricted income and wage domains alongside limited environmental capacity constrain economic performance. Hence, environmental capacity expansion and initiatives towards sustainability warrant specific attention. Illustrations are made with reference to the Australian economy and her response to the 2008–2010 global financial crisis.

Keywords: environmental capital, environmental macroeconomics, macroeconomics

Suggested Citation

Thampapillai, Dodo Jesuthason, Macroeconomics Versus Environmental‐Macroeconomics (July 2012). Australian Journal of Agricultural and Resource Economics, Vol. 56, Issue 3, pp. 332-346, 2012, Available at SSRN: https://ssrn.com/abstract=2089223 or http://dx.doi.org/10.1111/j.1467-8489.2012.00579.x

Dodo Jesuthason Thampapillai (Contact Author)

Crawford School of Public Policy ( email )

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

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