A Descriptive Review on Ecological Economics and an Introduction of Ecological Circular Flow Model

Abstract

Perhaps the only assumption that all economists have accepted is that human needs are endless but natural resources are scarce. Mainstream economics assumes that this problem can be solved by price mechanisms without considering the ecological effects. Therefore, they continue to promote economic growth. On the contrary, ecological economics oppose the promotion of economic growth because it has ecological effects such as pollution, ecological degradation, climate change, global warming, etc. So, they call attention to economic degrowth.In this paper, the aim is to briefly present the focus of ecological economics, to set forth the similarities and differences between ecological and environmental economics, to put forward economic degrowth discussions and to fill a certain gap in the literature. Circular flow model which is one of the main pillars of economics is illustrated with a more realistic consideration and a broader view and named as “Ecological Circular Flow”. This broader version, inspired by relevant primary studies, is essentially a simple ecological version of the mainstream’s circular flow model and has a crucial role to reconsider today’s economic activities and their consequences.