There are a lot of people who say we will soon run out of oil, and a lot of people who say we won’t. Some claim that financial markets are beyond saving, while others see them on the mend. And quite some people believe that way too many humans live on our planet, but others are certain there will always be new technologies to solve problems arising from a growing population. What all these groups don’t talk about is that the above things are closely intertwined, and none can be looked at without examining the other. IIER is trying to do just that.
The Institute for Integrated Economic Research (IIER) is looking at macroeconomics on a global scale. Our focus is on researching the "human ecosystem" from an economic perspective in a broader sense than it is typically handled anywhere else. In doing so we are independent and not oriented towards profits.
Our research is framed by one key hypothesis: That the world of humans is fundamentally not altogether different from any other species on this planet, and that we have to live and thrive within the boundaries of the resources this earth provides. So - for example - once all the oil is used up, we will either have to find a substitute or significantly change our way of life.
Unlike any other species, mankind has come up with an abundance of technology solutions, cultural achievements and some significant economic inventions - such as "money". While those tools don't change the fact that our ecosystem has boundaries, they greatly enhance our ability to explore it and to draw larger benefits from more resources more quickly. Flexible trade - an aspect also mostly unknown to other species - further enhances the ability to generate wealth from transactions that benefit two or more parties. Yet finally, this does not change the fact that our resources are ultimately not infinite.
This view fundamentally breaks with a key belief that has emerged among economists during the past decades: that "permanent growth" is something normal and sustainable, maybe briefly interrupted by small bumps labeled "recessions". If that were the case, and decline no longer existed for humans as it does for every non-human ecosystem, we would ultimately have overcome the laws of physics, which clearly state that a finite system cannot cater to indefinite growth. And actually, human history provides many examples of significant periods of decline, as the rise and demise of many a great ancient culture shows.
This “human ecosystem” is the focus of our research. Our objective is to provide solid science that is stripped as much as possible from personal belief and just accounts for facts, open to the interpretation of our audience. While we deliberately don't build on traditional economic models, we obviously include and combine whatever we consider relevant, with three key objectives in mind:
- come up with models to understand and predict developments of the "human ecosystem", including key aspects like natural resources, current and future human contributions (in technology, finance, etc), and exchange between subsystems globally;
- develop macroeconomic models explaining the contribution to income and wealth of those aspects - irrespective of them being man-made or inherent to nature;
- provide guidance for a future in which - as we believe - some boundaries might limit further growth.
The year 2009 saw IIER at a turning point – we’ve moved to a more professional setting, which includes stronger relationships with traditional academia, a significant uptake in the number of projects we are working on, and more funding. We see it as our responsibility to connect the dots that have so far been unconnected, and scientists from all domains are more than welcome to embark on this journey. If we all can contribute to a better understanding of our world, the future might look a little brighter.