04 MAY,2020 | MEDC
Just as the global financial crisis of 2008 led to a relook at many aspects of economic theory and policy, so should the present situation. To begin with, environmental and climate-change factors now need to move centre stage in standard economic development theories. An appropriate social discounting rate also needs to be applied to all economic models, as a stitch in time saves nine. Much conventional wisdom needs to be reviewed. Humans need to interact with nature more sensitively, always remembering that we are living in an increasingly interconnected world. These are issues that have always been part of economic analysis, but have so far been dismissed as low priority. However, the world has learnt the hard way that these and other similar issues can no longer be ignored. Economics now needs to squarely address people-induced risk factors in the ecosystem, whose potential impact can be far more detrimental to humankind than anything emanating from the financial architecture.
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