ABSTRACT
A consistent concern of ecological economics has been the biophysical and institutional foundations of the economy. During the formalisation of the field, scholars such as Daly (1968), Victor (1972), and Herendeen (1974) helped align questions over the energy, materials and pollution basis of the economy with methodological approaches of input-output analysis. Through providing a framework of interdependency, input-output provided one of the early empirical bases for studying the relationships of the macro-economy including its supporting institutions and environmental stocks, flows and sinks. For instance, Daly (1968) sketched the economy as a system embedded in social institutions and sustaining ecosystems, building on the foundational work of Leontief (1936) and Stone (1961). The early work included an important exchange of ideas between economists and ecologists—on the structural properties of (economic and ecological) systems, the complementarity of inputs in the production process (particularly energy) and an early attention to embodied pollution in trade flows—critical to understanding the difference between relative and absolute decoupling of the economy from energy and materials [Chapter 11].
