Positive and Negative impacts of Economic Growth
Economic growth is defined as the aggregate income of an economy increases over time and what basically everyone is striving for. Economic growth generally reflects that economy is getting wealthier, living standards of an individual are getting better, advancement of technology, wages increase and as well as the unemployment rate is getting lower. Economic growth is usually measured in terms of real Gross Domestic Product which is the total market value of goods and services produced. Besides that, a country’s economic growth is really important especially to those developed countries such as the United States because this would affect the country’s development and in order to remain competitive in terms of trade. Hence, economic growth is set as a desirable objective to all economies. A good development of economy will bring the country money and also improves the civilians’ quality of life. However, there are many effects of economic growth which are divided into positive effects and negative effects. The positive effects are improvement in quality of life, equitable growth and income distribution while the negative externalities are resource depletion, consumerism and negative environmental impact.
Quality of Life
One of the effects of economic growth is the improvement of the quality of life. Quality of life is a term that measures the well-being of individuals and societies. A better quality of life is then refers to a better lifestyle which includes better facilities, receive high technology of medication, and as well as higher education standards.
2.1.1 Better medication
Improvement in quality of life would lead to a better medication. As the development of medical services is going on, most of the hospitals and clinics are now well-equip with high technology of equipment. Those diseases which are impossible to cure last time, is now possible by going through the years of researches and discovery of new medicine as well as a better way of treatment. In addition, all these improvements in medication help to reduce the pain suffered by patients, reduces the side effects after a medication that would possibly affect the patients and increase the chances of surviving from chronic disease. Besides that, most of the disease treatment is now carry out with high technology of machines would reduce the error that might occur during the treatment and would increase the chances of recovery from the disease.
2.1.2 Better education
Next, quality of life which also refers to a better education standards receive by the societies. With today’s technology, better education can be obtained through online, like e-learning. These online educations provide good education and can be accessed at home online. Aside from that, e-learning has a wide range of levels, from elementary to secondary, depending on the user needs. Other from that, e-learning provides mock test which allows user to test their level before taking on the real exam. It helps to prepare them for the big finals. A good economic growth brings wealth to our country and we will have advance medical technology as well as online learning education network can be built and school can have better educational equipments. Therefore, economic growth allows public societies to have a better quality of life.
2.2 Environmental impact
The other negative effects of economic growth would be the negative impact on the environment. Human’s carefree action brought many environmental impacts. Their carefree actions are due to their greediness. They are capable of doing anything to achieve their goal no matter what are the obstacles and outcome.
2.2.1 Building constructions
Negative environmental impact is caused by one of the factors which are the construction of building. As the population increases, more land will be occupied with the construction of house estate. This acts of construction of housing estate would encourage massive deforestation to takes place which slowly causes all kinds of pollution and as well as animal extinction. This massive deforestation is often not well-planned by developers as they want to save more time where time refers as money to them. In addition, economic growth allows more construction project to be carried out as now people are getting wealthier and they would most probably hold more property by buying more houses to show how wealthy they are or maybe for the purpose of investment. In conjunction with this, developers would carry out more construction project as they see the chances of gaining profit.
The major negative environmental impacts of economic growth would be the creation of pollution. All kinds of pollution would be created throughout the economic growth which includes water, air, noise, land, radioactive, and thermal. Pollution is seemed to be the major issue in today’s modernization world. It leads to many health problems and even caused death. Many people are realizing the seriousness of pollution but there is not much action to be taken and majority of people seem to be ignorant to this issue. As the economic development goes, they would be eventually more waste are created. This is because consumption by the consumers is higher during economic growth and business firm would increase their production which creates toxic wastes. Factory would simply illegally dump those toxic wastes into the river as to save the cost of disposal of the wastes. Therefore, economic growth would mainly results to negative environmental impacts.
2.3 Resource Depletion
Negative impact to economic growth of nation is resource depletion in the near future. The continuous search for better technology has blinded mankind from realizing the depletion of Earth’s natural resources. Natural resources are limited resources that take millions of years to form on Earth. Earth’s resources are used in many different ways and they are widely used because many of the common things we used in life require natural resources to make.
2.3.1 Earth is drying out
Resource depletion would eventually cause the earth to be drying out. Increment of production especially during economic growth, would speed up the process of drying out. Business firm would increase its production even when its notice that there are limited natural resources, because they have no other choice as they are unable to find inputs to substitute or it may cause more expensive if using other resources as the input which increases its expenditure. They will continue to produce as to gained more profit during the rise of the economic. One of the most harvested natural resources which is massively use for production is coal. The oils and tars produced processing coal are processed into a variety of organic solvents and compounds such as plastics, motor fuel, photo developer, perfume, medicine, and sugar substitute. They are non-renewable resources because it takes millions of years to form.
2.3.2 Discovery of a new source of energy
In order to prevent the massive resource depletion on Earth, researchers have tried to look for new alternative resources. The rise of economic but with limited resources creates obstacles for further production and so it eventually urging the researches to speed up on its research on new sources. For example, China has built a multi-million dollar research base on its east coast to accelerate the study and exploration of deep-sea energy resources. In addition, scientists believe sea beds at a depth of 4,000 to 6,000 meters hold abundant amount of rare metals and methane hydrate that can serve as a new energy source. All the countries are caution about resource depletion and have taken a step closer towards preventing massive resource depletion on Earth. Everybody must also do their parts to help prevent resource depletion. If resources were to be dried out, the world economy will cease to grow. Therefore, economic growth would leads to resource depletion.
2.4 Equitable Growth
Equitable growth helps increase wealth of our nation through improving economic growth. Equitable growth maintains the balance of economic growth in both urban and rural areas.
2.4.1 Restructuring government spending in various sectors
Equitable growth is achieved through restructuring of government spending in various sectors. While acknowledging the main role of economic growth, it has become widely understood that extra measures has to be made to ensure poorer sections of society participates in economic growth as well. For instance, a country with low inequality with a growth rate of 2% per head and 40% of its population living in poverty, can halve poverty in ten years, but a country with high inequality would take nearly 60 years to achieve the same reduction. That is why the government has been restructuring government spending in various sectors with the purpose of improving regulation and performance of both public and private sectors. There is even a policy introduced to encourage private sectors to create more job opportunities and employ people from disadvantaged groups as economy grows.
2.4.2 Research to improve economic growth of country
Besides that, research on ways to improve economic growth that leads to equitable growth within a developed country is important. Even when the economic is growing but it is not necessary equivalent to equitable growth so there is lots of efforts should be done in order to achieve equitable during economic growth. For instance, the Center for Equitable Growth was built in most of the countries worldwide to promote research that explores ideas for achieving economic growth that is fairly distributed. The goals of the Center are to encourage research in equitable growth and to help develop public policy that can simultaneously improve the distribution of economic well-being and economic growth. The Center is particularly interested in research regarding the connections between inequality and economic growth, the effects of government policies on both the distribution of economic well being and economic growth, as well as how the public views on equity and fairness affect policy making. Centers like CEG exist because they know equitable growth of a country plays an important role in improving economic growth. That is why government must maintain a balance in economy in rural and urban area. Thus, economic growth plays an important role in equitable growth within a nation.
The other negative effect of economic growth is consumerism. Consumerism is defined as increase in the consumption of goods. In today’s world, consumerism is shown to have negative view towards people purchasing behavior and their way of living, which would then lead to materialism.
2.5.1 Artificial needs
Consumerism would lead to demand for artificial needs .Artificial needs which mean a desire of something which we do not need it. Majority of people would be happier if they are getting wealthier. People would then, demand for a better life which includes more money, better food, more clothes and a bigger house. They would never be satisfied on what they are having now, as there are more and more new invention of things coming out such as cars, shoes, and electronic gadgets. On the aspect of the business firm, they would use different kinds of business tactics in order to make people to buy their new products through advertisement such as newspaper advertisement, poster on the wall, and television commercials. All of this does not just attract people to know their new product but also make the consumer ‘wants’ to become a ‘need’. Thus, we can say that industries influence consumer by developing new taste and as the wants is created so consumers will become the servants instead of the masters of the economy which buy the goods.
2.5.2 Consumption can affect environment
On the other hand, consumerism can also affect the environment in many ways. It is common that economic growth usually comes along with environmental degradation. As the consumption was kept on increasing, it requires larger inputs of energy as well as material in order to produce or generate larger quantities of products. Therefore, people would be working more on exploitation of natural resources projects and slowly it results to the accumulation of waste and concentration of pollutants such as toxic which in the long run would damage the environment. For example, the act of burning forest in order to clear the forest in a faster speed as the demand for land is increasing would results to all kinds of pollution such as air and water pollution. In addition, this would results extinction of rare animal species. Even economic growth would bring happiness to most of us in terms of incomes and better lifestyle but the detrimental impact on the environment is irreversible. Therefore, economic growth is the major factor that leads to consumerism.
2.6 Income distribution
Income distribution would be another positive effect of economic growth. This which means the total income of nation those share between households. As the economic is growing, it will eventually increase the average money wage rate receive by each household and results to a higher income equality distribution among the households.
2.6.1 Poor Category
Besides that, income distribution to poor category increase during economic growth. The poor category is provided with more jobs opportunities and therefore the unemployment rate would decrease. In addition, efforts of government to boost economic growth by giving subsidies and building more facilities for the poor category to encourage them to contribute to the country by producing more output. For example, subsidies are given by the government to the poor category such as farmer in order for them to increase their production of rice, fruits and vegetables as the demand is increasing during the economic growth and so it will eventually increases its profit. As we can see now, the entire nationwide is putting lots of efforts on development on rural areas such as construction of more buildings, construction of roads to connect between different isolated places in rural areas, and also increasing number of hospital with advanced health equipment. In short, economic growth is the only factor that helps to achieve the objective of equitable income distribution between the poor and wealthy category.
2.6.2 Job opportunity to increase
Income equality distribution shows that the increase of job opportunity in their respective fields. This is because in the period of economic growth, more firms is developing rapidly and they need more work force in order to runs its business such as more accountant if the business accounts figure is growing bigger or maybe more engineers in working out to discover more gadgets in science world and so it is often say that economic growth means more jobs. In addition, during economic growth period more people have the ability to buy as the income increases as a result from the profit gained from either business investment or through their own job such as working over time or bonus. Thus, demand for goods and services would rise sharply as they now have more money supply and so all the firms would hire more workers in order to satisfy the unlimited wants of people. Therefore, equitable income distribution can be achieved through economic growth.
In conclusion, economic growth bring about positive effects which would be income distribution, equitable growth, and better quality of life; whereas negative effects would be consumerism, resource depletion, and negative environmental effects. Economic growth is nonetheless very important for the development of a country but it is equally important to well-planned on one’s country economic growth in order to avoid any detrimental effect on the country. Besides that, in order for a country to experience economic growth, the countries itself which include government and the citizens have to be alert on the movement of economics and contribute to the country by being a good consumer.
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