Why do we need economic growth?
Answer:
In order to understand why we need growth we need to understand what growth is which is basically an increase in a nations GDP (fancy word for output). The reason why we want output to increase is because that offers several benefits for our economy such as increase in jobs (the more output is needed the more jobs are needed) lower prices (because companies gain economies of scale and because of the increased competition) as well as more produce to export (exporting more means we can import a lot more without suffering a trade deficit).
However, when growth arises as a result of an increase in demand (not suplly as mentioned above) this can potentially lead to inflation because the more people demand the greater the pressure on firms to increase price because they face increased cost by hiring labour and opperating above the point of economies of scale which overall leads to higher costs.
Overall we see that supply side growth is very benefitial for the economy whereas demand side growth even though it tends to lead to more output and create more jobs it usually leads to inflation.
Because everthing grows.
economic growth means easier and happier lives because little or hard to realize we live by the economy i mean man "no romance without finance" "can you pay my bills" and one of my favorites "money makes the world go round" i like this one because i think it will answer ur question completely economy only survives by money, everything it stands for is for money or because of money. so if we don't have economic growth we stay @ the same level that of us struggle and complain but if we have a growth their will fewer and fewer by it's growth impact. Damn i sound like a MSN anchor lol
GOOD LUCK N LYFE
A better question is the initial purpose that economic growth ocne had and has now lost.
That's a good question. For a long time now, growth is synonymous with progress. Any company that does not grow in terms of profits or turnover is deemed to be failing. Consolidation, stability, 'holding one's own' is not much valued. We demand that things 'grow'. The economy must grow or we are somehow doing badly.
I think the reason we are so fixated on growth is that society is driven by rising aspirations, which are in turn bewitched by the lure of 'growth'. The more we grow, the better we will be, is our hope. So we aspire to get there, and when we do, we want to keep going. It's a vicious circle. The problem is that the benefits of growth are not evenly distributed, and as we have seen in the UK, the gap between the 'haves' and the 'have-nots' has grown even bigger. Also, we are often growing in unsustainable ways and at the expense of other life-forms. Resources we depend on to maintain our profligate life-styles are depleting fast or are being threatened with extinction. It's not a question of 'if' but 'when' we will hit the buffers. We should be looking at how we define 'growth'. Not in economic terms, but in other qualitative dimensions.
There are many layers to this question. First, who is "we?" I assume you mean society. What do you mean by "need?" Often, analyzing such questions leads us to better questions. By "need" I assume you mean that it is necessary for the general welfare of society. I can give some partial answers.
First, population growth causes a necessity for economic growth. People need jobs and the only way for jobs to be created is for entrepreneurs to offer more services and industries-economic growth.
Second, there is an expectation factor. If people see that they are not living any better than their parents did then they can become disgruntled and are more likely to engage in deviant behaviors.
Most importantly, though, is that economic growth is a side consequence of what is truly necessary: liberty. People need to have opportunities for self actualization and only an economy that allows for private enterprise can offer that.
The one flaw in this analysis, however, is that growth is not sustainable ad infinitum. Eventually, we will run out of natural resources. Hence, society must find a way to stabilise its demographics and have sustainable economics while still offering free enterprise acceptable opportunities. No economy is perfect. Whether we are talking about the more capitalist USA or the more socialist France no society has succeeded in pleasing everybody.
Strictly speaking, we don't -- to maintain current living standards. This is assuming that the population is stable.
But if the population increases, then the economy must grow by the same percentage. If it grows by less, then there will be a decline in GDP per capita (there has to be: the same GDP, but now divided by more people?). That's what everybody's afraid of.
You dont "need" growth if you have your basics covered: Food, housing and clothing. However if you want to keep up with the Johnsons better pray for growth. Hummers are not free but will make you very very happy. Even love you long time.
So happy that two Hummers will make you TWICE as happy! Trust me, Bill Gates lives in eternal bliss, he is the happiest man on earth.
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