Sustainable finance
Steady-State Economy
Definition
A steady-state economy is an economy of stable or mildly fluctuating stocks of physical wealth (capital) and population, with the lowest feasible rates of matter and energy throughput, maintained within the regenerative and absorptive capacities of the ecosystem. Developed by ecological economist Herman Daly from John Stuart Mill's "stationary state", it treats the economy as a subsystem of a finite ecosphere: once scale exceeds optimal size, further growth becomes uneconomic — costing more welfare than it adds — regardless of what GDP records.
References
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This reference provides supporting context for how “Steady-State Economy” is defined and used.
Overview
How it is used
The model structures post-growth economic research, the Center for the Advancement of the Steady State Economy's policy work, and critiques of growth-dependent fiscal and pension systems.
Why it matters
The steady-state economy asks the question sustainability cannot dodge: what does a healthy economy look like when it stops growing on a finite planet?