Global Financial Stability

More covincing facts pointing out that global economy requires growing interest in education and skills training in order to enhance competitiveness. That is to say not to be overwhelmed by apparent stability of global economy with growing concerns over environmental consequences of continuing with business-as-usual.

Finance ministers and central bankers were notable by their absence in Davous and, when they did appear at the forum, their bored-looking audiences and moderators could scarcely think of any questions to ask.The sources of newfound stability in Economy assumed is due to "globalization, active demand management, financial deregulation and the addition of three billion new consumers and producers to the global capitalist system." The "active demand management" nestling in amongst the others draws attention to the success achieved for smoothing the business cycle, as Pirie notes (adamsmith.org): So after decades of upheaval we finally cracked it and know how to keep the economy on stable growth? Finance ministers and central bankers were notable by their absence and, when they did appear at the forum, their bored-looking audiences and moderators could scarcely think of any questions to ask.I rather think that the gods punish people who talk like this. After hubris comes nemesis. I'd like to believe it to be true, but there's a nagging doubt in my mind that the record years of stable growth might derive not from the cleverness of politicians or even bankers, but from a set of unique conditions which might not be susceptible of future replication. It might be an interglacial period. People thought they'd cracked it in the 1920s. Everything seemed to be booming, and people were getting richer. That was the way the future was headed. The gods punished them with the Great Depression and World War II. The bright side, on which I usually look, is that we might have built sufficient flexibility and adaptability into the world economy that when the gods do decide to throw something at us, we might survive it.

Source: www.adamsmith.org





Willingness to pay and ecological economics

"Willingness (and ability) to pay is the foundation of the economic theory of value. The idea is, if something is worth having, then it is worth paying for. The idea extends to environmental resources like water quality and natural resources like trees. The key assumption is that environmental values are anthropogenic. Whatever people think the environment is worth is what it is worth. Economic methods can be used to attach estimates of willingness to pay to changes in the level of environmental quality and natural resource."

www.env-econ.net



Under conditions of imperfection information on real cost of natural resources and environment, people’s willingness to pay is based on ignorance of the real value as it applies to supply and demand economy. Evaluation of natural resources as if they are fast consuming products with no long term implications has to be modified. One suggestion is to substitute natural resources utility with labour force or time factor where possible – that is to say ‘devaluation’ of fast and easy mass products and services – rethinking productivity. We are already there - where we can question the miscalculation of the cost of fast consumption and mobility for their consequences on environment.