TITLE:
The Economy of Sustainability: Some Consequences on the Economic Theory
AUTHORS:
Giovanni Antonio Cossiga
KEYWORDS:
Sustainability, Economic Theory, Deflation, Inflation, Fiscal and Monetary Policies
JOURNAL NAME:
Theoretical Economics Letters,
Vol.9 No.8,
December
30,
2019
ABSTRACT: The economy of sustainability is usually portraying
the tendency to stability as a universal law regulating the development of the
mankind and nature relationship. The trend towards the stability of economic
systems is the guarantor of a constant and regular growth, in accordance with
the evolution of the environment around us. It follows that the deviation from
the stability rule is certainly possible but with some penalties. The main
penalty is the transformation of the linear and constant growth into the
conjuncture sinuous movement, so that the corrective recession would be
introduced into the economic circuit. Recession intended as a tool to bring the
deviated system back to the natural condition of stability. According to this
point of view, the recession is a sin to be paid in the economy management and
there would be no way to avoid to pay this price. Therefore, attempts to avoid
the penalties imposed to correct the system may be reckless. Trying to avoid
the penalty means only to refuse now that damage which would allow the
following return to the serenity of natural stability. It follows that the
inexhaustible attempts to correct the economic trend in favor of a constant
growth line do not take into due consideration that only the stable condition
of the economy can guarantee that tomorrow wouldn’t be worse than today.
Therefore, attempting to straighten the sinuous line of the cycle is absurd, at
least if we continue to remain inside the instability sub-world. The result is
that the ultra-Keynesian policies to support the cycle correspond to an
irrepressible desire to take action in order to mitigate the damage. But the
recession is a cure that sooner or later must be adopted. So, the options
offered by the fiscal and monetary policies to support the cycle can have some
effect, even satisfactory, but only in the short term. That is, they offer the
possibility to drag over time the showdown with the immanent tendency towards
stability. But sooner or later the tendency towards recession will return even
more urgent and it would be therefore appropriate to accept a present damage
for an advantage (constant growth) in the future, within an economic scenario
once again stable.