F&D Magazine: Economics and Nature’s Laws

 

Economics and Nature’s Laws JUNE 2025  (Credit: iStock/guenterguni) Among ongoing efforts to rethink the basic tenets of mainstream economics is a provocative new book by James Galbraith and Jing Chen. The authors sweep aside the intellectual structure of mainstream theory—which rests on concepts like the marginal utility theory of value, market equilibrium, and a steady state for the economy—and propose a radically different approach: “entropy economics.”   The book is part of an emerging biophysical view of the world, grounded in the laws of nature, which sees economic activities as resembling biological and mechanical activities. For example, economies are prone to become unstable as they expand and become more complex, and they need regulation to exist and survive.   Vivek Arora reviews Entropy Economics: The Living Basis of Value and Production by James K. Galbraith and Jing Chen. Read more A Critical Look at Dollar Dominance | The dollar remains central to the global economy despite the search for alternatives | Mouhamadou Sy   Future-Proofing the Euro | Europe’s policymakers must not rely on the next crisis to force reform to the single currency | Volker Wieland Point of View (Credit: Chantal Jahchan) Reclaiming a Policy Role for Economists | Acknowledging missteps, listening well, defending data, and avoiding jargon will help the profession engage | Karen Dynan   Europe’s Future Hinges on Greater Unity | But first the EU must overcome distrust between its member states and in its institutions | Simon Nixon   We Need a New Growth Compact| Innovation and integration can revive growth amid sweeping geopolitical change | Pierre-Olivier Gourinchas Europe: From Adversity to Advantage (Credit: Brian Stauffer) Europe’s Integration Imperative | The case for closer economic union has become more compelling as external challenges multiply | Alfred Kammer   Europe’s Elusive Savings and Investment Union | An integrated capital market must be accompanied by regulatory reforms to attract substantial investment | Ravi Balakrishnan and Mahmood Pradhan   Europe’s Innovators Are Waking Up| The continent’s innovation success stories and renewed sense of purpose defy criticism of overregulation | Alessandro Merli   Making Germany Grow Again| Long-term, future-focused investment can rescue Europe’s largest economy from stagnation | Ulrike Malmendier and Claudia Schaffranka   Plus, government ministers from three of Europe’s fastest-growing economies share their perspectives on how to revive growth:   Europe’s Economic Revival | Poland’s economic transformation can inspire Europe today | Andrzej Domański   Greece’s Remarkable Recovery | Strong reforms have turned it into one of Europe’s fastest-growing economies | Konstantinos Hatzidakis   Spain’s Shift to Success | Our balanced and sustainable growth is overcoming traditional dilemmas | Carlos Cuerpo “The European Union must unite to shape today’s global economy, rather than be shaped by it.”— F&D editor-in-chief Gita Bhatt Read more Also Featured (Credit: Matt Chinworth) Machine Intelligence and Human Judgment | AI could reverse the widening inequality driven by technology, or aggravate it | Ajay Agrawal, Joshua Gans and Avi Goldfarb   A Moving History | Migration has propelled human progress for hundreds of thousands of years | Ian Goldin   The Debate over Falling Fertility | A decline in global population later this century may threaten human progress, or it may lead to better lives | David E. Bloom, Michael Kuhn, and Klaus Prettner   The Longevity Dividend | Aging populations should be embraced, not feared | Andrew Scott and Peter Piot   Sustaining Growth in an Aging World | Older populations need not lead to slumping economic growth and mounting fiscal pressures | Bertrand Gruss and Diaa Noureldin   Stanley Fischer (1944–2025)| His storied career at the IMF, at central banks, and at universities shaped the study of macroeconomics and the next generation of macroeconomists | James Boughton Our Regular Departments (Credit: Courtesy Monetary Authority of Macao) For Currency Notes, Salsa Mazlan tells how Macao SAR’s unique history has yielded different yet equally elegant versions of the same banknote.   Politicians often strive for competitiveness, but in most cases productivity is the surer path to prosperity, Kevin Fletcher writes in Back to Basics.   Simon Johnson discusses technology, inequality, and democracy with Bruce Edwards for Café Economics.    Picture This shows how stalled trade and rising tariffs are testing global economic resilience.   Andreas Adriano profiles Agustín Carstens, finance minister, head of the BIS, and central banker with a start-up mentality, for People in Economics.   Nick Owen  Managing Editor | Finance & Development   nowen@IMF.org Stay connected with the International Monetary Fund: