Positives and negatives of Economic Growth
We would have often heard of increase or decrease in GDP, what does this mean? GDP is the way we define the economic growth. Increase in GDP is the economic growth. Which in turn defines the productivity of the country. Usually bringing in the advanced technology, increasing the literacy rates and increase in production as well as quality of goods and services, defines the economic growth. And this productivity should be more, than compared to before period of time.
Causes of the Economic Growth
Increase in immigration and birth rates also increases the economic growth. The increase in the above, in turn increases more labor and more production of goods and services, which is the “economic growth”. But not all the goods and services contribute to economic growth. Increase in consumption, trade i.e. net exports and imports, investment on firms stand as causes for economic growth.
Positives of the Economic Growth:
Increase In employment factors
Increase in production of goods and services reflects an increase in call for more labors as well as employees for jobs. So employment curve gradually increases, resulting in proper sharing of nation’s wealth. It also relates to the benefit of the business people as it increases profits. If you notice growth is an important factor for every nation, because it is the way we can divide the wealth pie between rich and poor and poverty can be reduced. And every country’s wish to eliminate the poverty.
No taxes if there is an Economic Growth
If country’s revenue increases then there is no need for tax imposition on people. Because now the government of that country is having more revenue with it to invest on poor people as well as on welfare of the people like, providing financial supports and goods to public. As of now the country will be having good wealth to spend on people. It invests on bringing in more advanced technology and greater resources.
Country’s pride lies in Economic Growth
If country’s GDP increases, it means they are having advanced and upgraded techniques for their people like, advanced methods for diseases, hybrid cars and many more which helps the country to extend its technology and put in to use to actually help other countries as well as people will have more purpose for their lives. It leads to more relations with other countries regarding exports and imports and becomes more civilized country globally.
Benefits a person experiences by Economic Growth.
Person in the society experiences:
Profits in business, higher productivity followed by higher wages, lower costs per unit in the market, standard of living, lifestyle increases, and labor productivity increases, life assurance increases.
Negatives of the Economic Growth:
Effects to natural resources and consumption of more resources
Due to increase in production, there will be an increase in industry sector as well as production sector resulting in increase in pollution and industry effluents, less space for transportation as more industries come to picture. All this will have bad consequences such as loss of natural resources due to pollution and deforestation.
People and industry firms tend to consume more and more resources for production of more goods and services, for example fuel, petrol, minerals, scarce resources.
Higher costs of goods and services
Sometimes increase in real GDP, creates changes that people cannot reform and experience poverty as the pie of the wealth of the country may not be distributed properly. Obviously there is an increase in revenue of the country, but the rich get richer and poor poorer. This type of changes and inequalities are seen more in up grading countries and fast growing countries. The people due to increased economic growth experience, higher costs and this is called inflation.
Culture and country’s heritage
In this journey of increasing productivity, there will be more advanced technology and new practices that we lose the control on our past practices and culture.
There is a common flaw which every country faces, while undergoing economic growth. I.e. if the country is getting developed and advanced, then population increases as well as immigrants increase, due to available resources in this country, now people migrate from villages and towns to cities, and thus creating overpopulation in cities, which in turn is nothing but increased pressure on available resources and, this leads to scarcity of available resources and finally increase of prices of goods and prices. Which is a counter part of advantage of economic growth.
Only some people will have access to it
Some people who live in remote areas may not have access to this increasing technology and may not take advantage of this. They may not get benefits of literacy affects or hybrid cars. Again same thing repeats, rich get access but poor remain the same without benefits.