John Maynard Keynes predicts in 1930 that growth ends within a century. However, he was not sure if post-growth capitalism was possible. At the moment, the mainstream economic perspective still considers the growth to be a vital policy objective. They believe this kind of thinking is essential to the health of the capitalist economy. Therefore, the concern remains that a capitalist is set to collapse without the growth.
According to The Conversion, a latest published research suggest a different view, which says a post-growth economy could actually be more stable and bring higher wages. It is safe to say that capitalism is indeed unstable. In fact, it is prone to the crisis even during the period of an established growth. Take it from the great financial crash from 2007 to 2008.
Meanwhile, the studies of post-growth economics in the past passionately aimed to find the perfect spot where the economy is steady enough to catch up. Unfortunately, the constant change in theory along the way has failed to address the question whether the end to growth would make the economy more or less stable.
The Conversion revealed a study where a novel mathematical macroeconomic model was developed based on American economist Hyman Minsky theory of financial stability. The said study believed that the financial crisis should be expected in capitalists systems due to the period of economic prosperity, which encourages the borrowers and lender to be more reckless. Sadly, Minsky’s masterpiece was overlooked prior to the 2008 crash. Since then, it received more attention.
Moreover, the model includes a banking sector that charges businesses interest on loans. Through this, the concern that the key feature of capitalism might create the need for growth itself will be addressed. Aside from this, the model also includes the basic labor market and dynamic wages. Check out Papa Survey official website for more inquiries.