Knowledge, Input-Output Complexity and the Notion of Sustainability

Sušnik Urban, Sušjan Andrej and Hrovatin Nevenka
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Sušnik Urban: Research Fellow, University of Ljubljana, School of Economics and Business
Sušjan Andrej: Professor of Economics, University of Ljubljana, School of Economics and Business
Hrovatin Nevenka: Professor of Economics, University of Ljubljana, School of Economics and Business

Mediterranean Journal of Social Sciences, 2019, vol. 10, issue 4, 1-10

Abstract: The paper attempts to synthesize the analytical nucleus of classical political economy and modern ecological economics. In essence this means making a connection between social issues of income distribution, accumulation of capital and economic growth with biophysical limits to economic development. We first model a simple growing system of production and explore its potential to maintain sustainability when using a single natural resource. Taking into consideration the laws of thermodynamics we show that the long-term sustainability of such a simple system is unlikely. When the model is extended to incorporate a wider range of inputs used and commodities produced, such complexity accompanied by knowledge-based structural changes provides necessary conditions for the long-run sustainability of a growing economic system. Since input-output complexity results from the division of labour on the one hand and from intentional R&D policies on the other, this conclusion also brings forward some policy implications regarding income distribution in the society.

Keywords: sustainability; socio-economic development; complexity; political economy (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:mjsosc:v:10:y:2019:i:4:p:1-10:n:1

DOI: 10.2478/mjss-2019-0047

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