Demand-driven ecological collapse
This chapter deals with social polarization and environmental degradation as the great challenges of our time. To address both issues on an equal footing integrated models are needed, which study the linkages between the socio-economic and the environmental sphere. The toy model of this chapter shows that demand-driven, post-Keynesian stock-flow consistent models can successfully be integrated with the study of physical stocks, flow and funds. Using this approach, we study interrelations between the monetary economy and the physical environment. Our results show that a non-growing economy is only compatible with ecological stability if the environmental impact of the steady state is sufficiently small to avoid continuous degradation of the ecological environment.