Economic Growth Essay

scotch app poleage Essay1.Executive Summary economical evolution is what every economy tries to achieve for the good of everyone as a whole. Developing, producing to a greater extent(prenominal) than than, change magnitude wages, steeper levels of education, burst and better technologies is what we strive for. But doing all that, does that mean that we be donjon a better life? Or is it just the lofty of doing better, non really the result that keeps us following the dream of a perfect instauration. The mental pictures of frugal growth are full of positives leads such as boost in infrastructures, urban development, higher education, globalisation, creates employment, higher wages for workers, better living standards for the existence, and the list good deal go on and on. But arent in that location any externalities to all of this? There are some of the negative externalities of growing above what the economy can take, reaching the limits where growing is counter-pr oductive. Some of those disadvantages of growth are outlined in this report, such as health problems arising, environmental issues, education issues as well, and how standard of living doesnt always mean better is acquire much.2.IntroductionA useful metaphor for production in an economy comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cookery one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved more(prenominal)(prenominal)oer by doing more and more of the same kind of cooking, we could eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. Human account statement teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes generally produce few unpleasant effects and gene come out more economic value per unit of raw material. (Henderson, D. 2007) This little introduction is a way to say that the more diversified an economy is the fewer side effects it testifyament have to bare. A more sustainable and spread out use of the resources available in the economy.Back in the days countries tend to produce unaccompanied the essentials for survival, most part of the economies were set to produce things identical food, clothing, and houses. But nowadays, only small parts of economies are used to produce the so called essentials. The actor behind this change is the industrial revolution in the late 18th and early 19th centuries when major changes in agriculture, manufacturing and transportation had a profound effect on the socio-economic and cultural conditions in Britain. The changes subsequently spread throughout Europe and North America and eventually the World, a process that continues as industrialisation. The onset of the industrial Revolution marked a major turning point in human s ocial history, comparable to the invention of farming or the rise of the starting signal city states almost every aspect of daily life and human society was eventually influenced in some way. (Wikipedia.com, 22 April 2008)The growth has been so warm that some economies are almost reaching a stall, reaching the maximum. On the one hand if we look at specific examples of natural resources (fresh water, ocean fisheries, atmosphere, ecosystem), in that location is strong evidence that the range at which we are currently utilizing them are unsustainable. (Dasgupta, P. 2008) But a major factor can prevent this to happen unless it doesnt mean its a good thing this factor is ecological restitution caused by growth. Global warming is one of those constraints that in kind of rather than later leave effect on our everyday life and on how we should be monitoring growth.Damages to our environment is not the only problem caused by economic growth, one of the other concerns of every societ y is whether or not we have reached the limits of human carrys as well. What more could we possibly need? Do we have to keep improving on technology is it for our basic needs or just for pure luxury? People earn more today but doesnt that mean that we should be better off than 40-50 years agone? Spending on education has become insanely high but are our children learning more today? Husbands and wives both are working full time jobs now to run their families, but 40-50 years ago when usually only the husband was working, werent families having a good life? Is growth helping or hurting society as a whole, and hence answering the question is economic growth becoming counter-productive?3.Economic Growth and UnemploymentEconomic growth is believed by mint to be a good thing because of the jobs it creates and how it helps augment per capita Gross home(prenominal) Product and consumption of society as a whole. But studies in the United States showed, by using the Daly-Cobb Index of S ustainable Economic Welfare (taking Gross National Product environmental cost- extra spending on health occupy, education, commuting and urbanization needed to support growth) concluded that economic social welfare in the US increased substantially during the 50s and 60s, but levelled off at the end of the 70s and has been in eliminate since the 80s. (Siegel, C. 2006) And also according to Okuns Law, for every one percent by which the actual unemployment rate exceeds the normal unemployment rate, real Gross Domestic Product is reduced by 2-3%. The Law outlines the negative relationship between the GDP growth and unemployment. Growth doesnt always bring along what people usually expect more work. The ideal growth in order to stop unemployment from rising is a 3% annual growth. (Siegel, C. 2006)So growth as well can be considered counter-productive, in terms of employment for an economy, if it is not properly managed. Unemployment rate wont just stop because the economy created mor e jobs and making more money, as outlined by Okuns Law. And the economy should have an ideal annual growth of 3% to maintain efficiency.4.Economic Growth and Standard of LivingEconomic development is sustainable if, relative to its population, a societys productive base does not shrink. (Dasgupta, P. 2008) The more you earn in terms of wages, the more you tend to defile. Wages are higher, so consumption tends to be higher as well. Going from bare essentials population tend to buy luxuries than they think they deserve for all the effort they put in at work. This is when the economy becomes more productive, when they are enjoying prosperity. However, prosperity in an economy is not static, over time countries tend to become more or less prosperous. An economic boom may bring a temporary prosperous environment to a country and much great wealth (in terms of higher wages, products quality, quantity, etc) to its population. Same if there is a depression, the hard work done to improve s tandard of living may be brushed away. (Sparknotes.com).A major enhancement of living standards is technology, the better the technology the more growth a country can experience. Technology is directly related to economic growth. To produce more we need more equipment, better quality, which can produce more at lower costs and in smaller time span. Also when a country is growing it tends to use more and more advanced material than it previously used to because of the greater productivity they entrust help them achieve in order to maintain the growth. Technology hence improves labour production. (That is how the inverse relationship between growth and unemployment rate is created when economy is growing, unemployment tends to rise as well because now the economy needs fewer workers to perform same job)As far as health is refer fast-foods and restaurants have become a common everyday routine for people. Cooking at home could be cheaper but why going cheaper when you can take a shit quicker and simpler, and when you cant find the time to cook. Thus, to the rescue are the restaurants and fast-foods, quicker and sometimes offer more variety as well. But the growth of fast foods and restaurants (but mainly fast-foods) consumption have somewhat caused a fall in health level of society as a whole. Not only food patterns caused this change in health condition but when we add to that the high consumption of cigarettes and the fact that besides work, eat, sleep people dont have much time of their own, or just dont want to find time (laziness) to do exercise, societies became less active physically and more obese. For that matter people seemed to think that spending more on health care would help them live longer and better. But now more and more people are realising that exercises and a healthy diet are the keys to a better life.The more spending we view on health care will somehow result in finding cures (hope in full sometimes sooner rather than later) for diseases such as cancer, diabetes, heart problems, aids, etc but the concern about this is that they are mayhap the reverse effect of economic growth. If we think about it (as mentioned above) people are less concerned about their health, what they could prevent now at the beginning is alternatively postponed to later when the need to try and find a solution to fight a health problem is here. Example of that would be obesity- our children are eating more fast foods than it was a case decades ago, they also are doing less exercises. breeding of our future is important to counter the negative effects of economic growth. A point has been reached where the amount spent on health care is much less important than exercise, diet and other individual actions to improve health (Siegel, C. 2006).5.Economic Growth and EducationEducation plays an important role on the road to economic growth of an economy. It could vary from education of employees to new technologies to education of the children, the future generation. Literacy is important nowadays anywhere, because it helps go past easily and if needs be in different languages. And also the sooner the children learn the easier it makes it for them to undertake subsequent learning results, obtained after examining information on Dutch school children (in the Netherlands, parents can enroll their children in school from age four), find that increasing enrolment by one month increases the math and language test scores of children from a low socio-economic background or ethnic minorities by .06 standard deviation, while those non-disadvantaged students scores remained the same (Bredt, J., Cycz, C. 2007)The education of the population as a whole is vital for an economy to be prosperous, so providing children with the tools to build a better tomorrow is the key for further successes. But thats the good part of growth, it helps us educate our population but economic growth can also be viewed as detrimental to education, when it come s to children.Growth has created more work for a larger pool of labour, including women and men, mothers and fathers, thus reducing the quality of a traditional family life by much. Parents nowadays have each a job (mainly full-time) resulting in less time devoted to growing children, who most of the times find themselves in day-cares. This lack of family presence affect the children emotionally, some of them end up using drugs, become delinquent, suffer from anxiety, depression, and some end up being unsuccessful in school. (Siegel, C. 2006).Another side effect of growth on education is that now children at school want more than just learning, they want to be entertained to learn. They want teachers to get them hooked on the subject, not just teach them, they dont want to make that extra effort to learn how to solve a difficulty on their own. They think it is like television or internet, everything is laid in from of them and they just have to sit back and watch. This phenomenon is outlined in a research paper The End of Economic Growth by Charles Siegel in 2006.6.Economic Growth and the EnvironmentFor the relationship between growth and environment I am using the example of newly industrialize Eastern-Asian countries. Countries such as Thailand, Hong Kong, Malaysia, Indonesia, and Singapore, for example, have been experiencing enormous growth over the past 20-30 years, lowering the population living under their poverty line by more than 50% and making good economic progresses. But the reverse of the medal is that this region is also among the most highly polluted part of the world with 9 cities in the worlds 15 most polluted cities. Other problems faced by those countries are soil degradation, erosion, coastlines and marine degradation, one of the highest deforestation rates in the world. In this region we can witness the damaging effects of rapid on the local environment. Environment was neglected because growth was viewed as the succeeding(a) essential s tep to evolution for the region, and now they are trying to control pollution rates, make proper use of their forests, take proper actions, such as tax and standards on further development, improving their methods and recycling. (Thomas, V., Belt, T. 1997). The developed countries have the same problems and we would tend to think that the developing countries would be more careful when growing, but the come-on of getting big and quick just overrides the fulfilment of a healthy environment. The questions here that appeal to us would be do the other developing nations care enough about the environment, and will they instead of growing big at a faster rate, just slowly (taking into considerations the environment) grow their economies, or will they make the same mistakes? And also there was another point brought forward by Bjorn Lomborg, a Danish statistician, in 2003 which defies economic growth and its effects on the environment. He argues that instead of restricting growth, environm ent decline is best cured by accelerating it. He pointed out that pollution in industrialised countries have been cleaned up and broadcast pollution in big cities are better than it was 30 years ago. In a way he is saying that reducing environmental indemnification is going against economic growth, and that countries will get used to it, and that it is greater at the early stages of industrialisation. Those arguments made by Lomborg in his book, The Skeptical Environmentalist, brought a lot of controversies from worlds leading environmental scientists. So, we can see that ideologies differ from people, and it can also be the case for countries seeking growth. They can accept that environmental damages are the price to pay for a better growth. (Hamilton, C. 2003)7.RecommendationsEconomic growth is more enjoyable when it comes with fewer negatives sides as possible, and there are ways to fully benefit from a growth without really impacting on other parts of the country, or even on t he population. Some examples would beSpending less on health services but instead focuses on a healthier way of living, with exercises, healthy diets, proper management of time.People could choose to work fewer hours, giving the chance to raise employment in the economy. Resulting in unemployed population getting a part time job. The whole economy will be able to work more as well, more people to work. Because the economy can only grow if people work more or better. (Mitchell, D. 1996) More people working at fewer hours.By choosing to work less, families also allow themselves more time to spend with their children and giving them a better family life resulting in better educated future.Imposing tax on development, putting severe penalties on pollution that may arise can be another way to put a brake to harmful development and a way to promote sustainable development of the economy8.ConclusionCounter-productivity is the problem that will sooner or later hit every economy, to reduce t he impacts it can have some measures need to be taken. Sustainability of the development, which is always bearing in approximation that every action can cause a reaction, and efficient use of resources would be a beneficial for future generations. We dont have the recompense to be individualistic. Before people didnt really realize that they could run out of resources at some point, they thought it would be here indefinitely, and we have reached a point now where everything is becoming scarce. Now, we know that our actions will have some effects on future generation we have this knowledge and need to make the most of it. Protection of the environment we live in, protection of our people, and sustainability of our development.