Using the Fisherian concept of income to guide a nation's macro-investment policy

摘要

A relatively new group of economists called 'ecological economists' believe that continuing macro-economic expansion eventually leads to a decline in sustainable economic welfare. Ecological economists have therefore called for a halt to the high-growth policies being widely adopted by many governments. To support their belief, and to demonstrate how Fisherian income can serve as a useful guide to a nation's macro-investment policy, a relatively simple formula for calculating Fisherian income is introduced and calculated for Australia for the period 1967-1997. The empirical evidence suggests that Australia may have surpassed its optimal or sufficient macro-economic scale in the mid-1970s, While, around this time, Australia began a transition to a lower rate of growth that arrested the steep decline in per capita Fisherian income, Australia had reverted back to a high-growth policy by the end of the study period. It chose not to continue the deceleration towards a steady-state economy. By 1997, per capita Fisherian income had increased to mid-1970s levels; however, the recent change in Australia's macro-investment policy is likely to have a detrimental long-term impact on the sustainable economic welfare enjoyed by its citizens.