The Desirability of Economic Growth Essay

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The Desirability of Economic Growth

The Benefits of Economic Growth

1. Economic growth means that real GDP has increased and therefore leads to an improvement in the material standard of living. This means that individuals have higher levels of real purchasing power enabling them to buy a greater volume of goods and services - increasing economic welfare ( bearing in mind individuals have unlimited wants ).
For instance, as western economies have grown over the decades consider the changes in 'material ownership' of products such as ownership rates of cars, dishwashers, housing, the number of foreign holidays taken - all of which have continued to increase as real spending power has grown.
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The Costs of Economic Growth

1. Pursuing economic growth policies can have some drawbacks, affecting the quality of life. Individuals will be required in a growing economy to learn new skills, be more flexible and often be more occupationally and geographically mobile ( ie prepared to move from one type of job to another, as well as be prepared to move location). The pace of work is thought to be likely to increase, all combining to add stresses to the individual. It has often be claimed that the desire for faster economic growth is creating a more hectic lifestyle - possibly offering less leisure time rather than more !

2. With economic growth comes a growth in consumption, more resources are needed reducing the remaining supply of non-renewable resources such as fossil fuels ( oil, gas and coal ), metal ores and other natural resources. As these are used up at a faster rate, there are fewer supplies left for future generations. Thus the finite pool is more rapidly becoming exhausted. The growing affluence of consumers has led to for instance, the ever increasing rates of depletion of rain forests across the world.

3. With growth comes the creation of new, and expansion of, existing businesses. These produce a number of so-called external costs or negative externalities. These are the wider spill over costs
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