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Abstract
When environmental macroeconomic frameworks replace standard macroeconomic
frameworks differences in policy outcomes ensue. The non-recognition of real environmental
capacity constraints could explain the inability of standard frameworks to deliver
on certain macroeconomic goals. Herein, environmental capital depreciation is
internalised into analytic frameworks of factor utilisation, aggregate demand and
aggregate supply. The analyses reveal that restricted income and wage domains alongside
limited environmental capacity constrain economic performance. Hence, environmental
capacity expansion and initiatives towards sustainability warrant specific
attention. Illustrations are made with reference to the Australian economy and her
response to the 2008–2010 global financial crisis.