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The Sustainability Issue; What Meaning for the Economic and Human Activity?

Giovanni Antonio Cossiga

Applied Economics and Finance, 2020, vol. 7, issue 3, 1-17

Abstract: The sustainability issue, understood as a good relationship between humankind and nature, can offer the opportunity to analyze certain aspects of the economic theory. If we admit that the stability in economy is a natural condition for linear growth and instead the conjuncture is a trouble for growth due to the loss of natural balance, some consequences will follow. The long fight against instability has not been won, always struggling between inflation and deflation. It follows that the fight against inflation first and then deflation couldn’t counter the real malaise of the global economy- the instability. That is the deviation of economic systems from the natural path of balance with nature. Therefore, the results obtained struggling with monetary alterations, although significant, would be temporary and unable to solve the core of the matter. It follows that the economic support policies have essentially addressed the formal aspect, I would say just indicative of the imbalance, without obtaining stable results in the natural balance recovery. From this point of view, the interventions of fiscal policy, despite some good tests obtained by trying to reduce the strength of the 2008-2010 financial crisis, have not solved however the poisonous aftermath of deflation. Moreover, during the last decade, the health of global economic systems has always required, to be maintained, a defense in the form of supporting policies through neo-Keynesian interventions. And not only that. Because the monetary policy used all its weapons, even unconventional ones, to defeat deflation- nonetheless, it didn’t achieve anything but just a mitigation of phenomena. Always provided, anyway, that the wave of new liquidity continues, as requested by the markets. The point is therefore which is the exit strategy from this situation, considering that the progressive exhaustion of the resources of fiscal and monetary policies sets the expectation of a potential progressive recession on a global basis. Well, according to the sustainability theory the recession is not a bad thing in itself, but it’s rather a cure whose impact we must learn to measure, having the view to mitigate the most negative social effects.

JEL-codes: R00 Z0 (search for similar items in EconPapers)
Date: 2020
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