Rapid economic growth can increase living standards and cope with population increases, but may be environmentally unsustainable and cannot reduce inequality. Definitions vary, but growth is generally measured by output. Increasing production can reduce costs and benefit poorer people, but may have diminishing returns. Rapid economic growth can help cope with population growth, but may be unsustainable due to resource scarcity. It can also widen inequalities, causing social unrest.
Rapid economic growth means a rapid expansion of the total amount of goods and services that can be produced by an economy, whether of a particular country or of the world as a whole. Its main benefits include an increase in living standards and the ability to cope with population increases. The main criticisms are that it may be environmentally unsustainable and that it cannot reduce inequality.
Definitions of rapid economic growth vary. Growth is generally measured by output, which is the total value of goods and services produced by an economy. Strictly speaking, however, economists usually define growth as changes in production capacity, even if actual production is lower. For this reason, economic growth tends to be viewed as a long-term change rather than simply year-on-year changes.
The main argument for rapid economic growth is simply that the economy can produce more, which in turn should mean that the population as a whole has a higher standard of living. Increasing the production of particular goods also tends to reduce production costs per unit, which makes goods cheaper. In the case of individuals this tends to have diminishing returns. As poorer people gain access to affordable goods and services, the benefit is substantial. The benefits become less dramatic as people get wealthier, and some surveys suggest there comes a time when increased access to goods or services does little to improve a person’s well-being.
Another big benefit of rapid economic growth is that it can help cope with rapidly expanding populations. If economic growth does not keep pace with population growth, individual benefits will be limited. There is an argument that population and economic growth may be linked: access to better quality food, health care, and labor-saving devices can increase the chances that people will be healthy enough to live longer and raise children.
One of the main arguments against the rapid growth of the economy is its sustainability. Some economists and other critics believe that there is an inherent environmental limit to growth when natural resources become scarce, such as if industry uses too much oil. Some forms of this argument even suggest that eventually the damage done to these resources may itself become a limit to growth.
Perhaps the main point of contention regarding economic growth is its effects on inequality. Proponents of rapid economic growth believe it helps poorer people by making more goods and services available at increasingly affordable prices. Critics believe unrestricted growth could widen inequalities, which could cause social unrest.
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