Macroeconomic Policy and Sustainability

Read this article for additional perspective about macroeconomic goals and the inherent conflict among them as they relate to a global environmental context.


Given the urgency of many macro-level and global environmental issues, together with the clearly inadequate state of current macroeconomic theory, it appears that the time is ripe for a reassessment of macroeconomic theory and policy. This reassessment could draw on some mainstream approaches, especially the New Keynesian variety as well as more radical Keynesian or ecological perspectives.

This article has sought to be provocative rather than definitive in its discussion of macroeconomic issues; it is intended to offer a starting point for further discussion. A balanced approach to the development of a new macroeconomics should neither reject the insights of mainstream theorists, nor rule out more radical views. It is essential, however, that the theorists and practitioners of a new macroeconomics should insist on a broad perspective that asks what macroeconomic policy can achieve in the areas of distribution, social equity, and ecological sustainability. The goal should be to provide a theoretical basis for the reorientation of macro policy at the national and international levels, linking efforts to promote local-level sustainability and equity with "greening" and restructuring of multilateral institutions.