Rethinking Macroeconomics for Sustainability (Development Matters)

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The world is caught in the deepest financial and economic crisis since the Great Depression. The economic crisis is not the result of what could be called a rare probability event ("a perfect storm"), but rather the unavoidable outcome of an economic paradigm that dominated policy-making since the early eighties, one that has come to view the natural resource base as simply another asset to be exploited. At the same time, we are trapped in a vicious environmental predicament. We are not only threatened by stagnation, deflation, unemployment and poverty. Our world is also menaced by climate change, deforestation, soil erosion, polluted aquifers and a man-made event of mass extinction.RethinkingxA0;Macroeconomics of Sustainability explores the relationship between macroeconomic policies and environmental sustainability, arguing that monetary and fiscal policies are as important for environmental stewardship as they are for growth and prosperityxA0;-- something that has not been adequately recognized thus far.

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Alejandro Nadal is an economist working in the Center for Economic Studies, El Colegio de MxE9;xico.