Steady State Economy

DEFINITION of 'Steady State Economy'

An economy structured to balance growth with environmental integrity. A steady state economy seeks to find an equilibrium between production growth and population growth. The economy aims for the efficient use of natural resources, but also seeks fair distribution of the wealth generated from the development of those resources.

BREAKING DOWN 'Steady State Economy'

The possibility of a steady state economy comes down to balance: economies may grow or contract, but ultimately fight back to an equilibrium. Ecological economists - major supporters of the idea of a steady state economy - posit that the environment cannot support an unlimited growth of production and wealth, since a growing population will eventually push down wages and use up an increasingly scarce base of natural resources.