Economic development is widely accepted as a prerequisite for a stable society. Yet industrial production contributes to the massively destabilizing phenomenon of global warming. How can nations reconcile their needs for growth, stability and sustainability?
New School for Social Research Economics Professors Duncan Foley and Lance Taylor are working to find out. Foley and Taylor were recently awarded a four-year grant to investigate the effects of economic growth on sustainability, distribution and stability. The project is funded by the Institute for New Economic Thinking (INET), a non-profit think tank founded by George Soros to support the development of a new generation of economic scholars working to shift economic thought to new paths and away from the theories that helped create the recent global financial crisis. The project will be administered through the Schwartz Center for Economic Policy Analysis (SCEPA), the policy research arm of the New School for Social Research’s economics department.
INET Executive Director Rob Johnson characterized their new grants as challenging conventional economic thinking in important ways. They emphasize inductive reasoning to escape the straightjacket of deductive reasoning founded on implausible assumptions, . We are also supporting creative research in sustainable economics for the first time.,
According to Professors Foley and Taylor, who have spent the last 40 years questioning key presuppositions of textbook models of growth, mainstream economics has not adequately dealt with the long-term consequences of economic growth, including the effects on climate change, the shift toward a service-centered economy, and the potential for financial and fiscal instability. Their project will aim to help correct this gap by investigating the sustainability of economic growth and implications for distribution, employment, stability, and economic policy.
Specific research under the grant will address the political economy of global warming; the role and limits of technical change in ensuring sustainable gains in standards of living for a world population on the order of ten billion; the consequences of climate change for financial and economic stability; prospects for a more equal division of world output; the role of public finance and government borrowing in sustaining employment and production; and policies that may be directed toward rebalancing the global economy.
An integral part of the project is the training of the next generation of scholars, including graduate student researchers working closely with Professors Foley and Taylor as well as collaboration with younger scholars at the beginning of their research careers. These young and mid-career economists will include those from developing countries, such as Brazil, Argentina, and India, and international organizations. Many of these potential associates attended The New School, such as Nelson-Barbosa-Filho, who received his Ph.D. from NSSR in 2001 and now serves as the Executive Secretary of the Ministry of Finance in Brazil. His project’s research will be disseminated through the SCEPA website, including contributions from researchers on the Economics of Climate Change blog, working papers, scholarly publications, books and two academic conferences. The conferences will be designed to foster dialog between project participants as well as and senior and junior scholars who adopt more conventional approaches to economic analysis. Overall, the project seeks to facilitate and build a larger global network of collaboration and dialog for both established and emerging economists devoted to innovative and critical economic research on fundamental problems of sustainability.