EC140 Lecture 11: EC140
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EC140 Full Course Notes
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Document Summary
Benefits of economic growth: rising living standards, normally measured by real per capita gdp, median income may be a better measure of common living standards, higher incomes lead to many better outcomes. Increases in consumption: better health status, higher life expectancy, easier to redistribute in a growing economy, more attention to environmental issues. Costs of economic growth: higher investment requires less consumption. Investment is a primary source of economic growth: trade between consumption now and consumption in the future, economic growth may bring less stability, creative destruction, structural unemployment. Case against economic growth: growth is not sustainable. Increases in economic growth commonly lead to increased use of environmental resources: arguments that environmentally friendly growth is possible are fairly weak, growth may not increase overall well-being, relative income matters. If growth leads to inequality - overall well-being may fall: economic growth may not be the right measure, productivity may be more closely related to well-been.
