Zero growth economics aims to achieve a state of equilibrium in the economy to minimize the risk of collapse. It balances supply and demand, maintains low unemployment, and reduces the likelihood of inflation or recession. Supporters believe it is superior to continuous growth, while critics argue that progress is made during economic downturns.
Sometimes known as steady-state economics, zero growth is a type of economic theory that has to do with the creation of a specific state or status within the economy. Specifically, the idea is to make use of all economic activities and policies so that a state of equilibrium is reached and maintained over a period of time. The idea is that, by achieving this balance, the opportunity for economic collapse is minimized, potentially triggering a recession or another type of undesirable pattern. While zero growth is considered a desirable goal by many economists, others disagree that this state is the best option over time and consider that changes in the economy are crucial to progress in technological and other areas.
With zero growth, there is a balance achieved between supply and demand that ensures 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 overall economy remains strong, with very little change in terms of growth or loss over the course of each calendar year. Events with the potential to trigger inflation or recession are kept to a minimum, and the natural checks and balances of a healthy economy offset any short-term impact these events may have.
Proponents of zero growth believe that the consistency provided by this type of economic condition is superior to the continuous growth model, as rapid and continuous growth often leads to periods when the economy suddenly booms. When that happens, companies start laying off employees; prices rise; and unemployment rises, sometimes in alarming numbers. While the impact of these events can be corrected over time, the process can take years. In the meantime, people living in a nation experiencing an economic downturn may be unable to buy food, pay rent or pay mortgage payments, or maintain a generally equitable standard of living.
Critics of zero growth point out that while the concept tends to work around a range of economic problems, progress is generally made in the face of adversity. Technology is likely to develop particularly during economic downturns, leading to new industries and products that help drive the economy. From this perspective, the up and down movement of a nation’s economy over time can be seen as necessary to promote advances in most aspects of society from time to time.
Asset Smart.
Protect your devices with Threat Protection by NordVPN
