Zero growth is an economic theory that aims to achieve equilibrium in the economy to minimize the potential for economic collapse. It balances supply and demand, resulting in a low amount of unemployment and a strong economy. Supporters believe it is superior to continuous growth, while critics argue that progress is made in the face of adversity.
Sometimes known as a stable state economy, zero growth is a type of economic theory that deals with the creation of a specific state or state within the economy. In particular, the idea is to use all economic activities and policies so as to achieve and maintain a state of equilibrium over a period of time. The idea is that by achieving this equilibrium, the opportunity for economic collapse is minimized, bringing up the potential for a recession or some other type of undesirable pattern. While zero growth is considered a desirable goal by a number of economists, others disagree that this state is the best option over time and view changes in the economy as crucial to progress in technology and other type.
With zero growth, a balance between supply and demand is achieved which ensures that desirable goods and services are readily available and affordable. At the same time, this state also has the characteristic of a low amount of unemployment at any given time. As a result, the broader economy remains strong, with very little change in terms of growth or loss during any calendar year. Events with the potential to trigger inflation or recession are minimized, and the natural checks and balances within the healthy economy offset any short-term impact such events might generate.
Proponents of zero growth believe that the consistency provided by this type of economic conditions is superior to the continuous growth model, as rapid and steady growth typically leads to periods when the booming economy will suddenly fail. When this occurs, companies start laying off employees; prices go up; and unemployment is rising, sometimes to alarming numbers. While the impact of these events may correct over time, the process can take years. Meanwhile, people living within a nation experiencing an economic downturn may not be able to afford to buy food, pay rent or meet mortgage payments, or maintain a fair standard of living generally.
Critics of zero growth note that while the concept tends to sidestep the occurrence of a variety of economic problems, progress is often made in the face of adversity. In particular, technology will develop during economic downturns, eventually leading to new industries and products that help move the economy forward. From this perspective, the up and down movement of a nation’s economy over time can be seen as necessary to promote progress in most aspects of society from time to time.
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