Sustainable finance
Steady-State Economy
Herman Daly's model of an economy with constant material throughput and population, maintained within ecological limits.
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.
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