Economic growth help.

I've looked through the textbook but I've found very little to answer these two questions. Any help would be appreciated.

1. Describe 2 factors that could improve quality of peoples lives but not cause real GDP to increase. is one factor to do with welfare as it wouldnt increase standard of living? not sure on another factor.

2. Discuss whether the costs of economic growth always exceed the benefits. (what are the costs to growth in the first place thats what confuses me)

Reply 1

loftx

7

AnonStudent

I've looked through the textbook but I've found very little to answer these two questions. Any help would be appreciated.

1. Describe 2 factors that could improve quality of peoples lives but not cause real GDP to increase. is one factor to do with welfare as it wouldnt increase standard of living? not sure on another factor.

2. Discuss whether the costs of economic growth always exceed the benefits. (what are the costs to growth in the first place thats what confuses me)

1. Things like freedom of speech, etc

2. Have a look at some revision material for the costs.

Reply 2

nero076

1. I'd say to look at distribution of income for this one - with any given gdp (national income) you must decide how to distribute it: either with a wealthy ruling elite and poor majority (like brazil) or an egalitarian approach, distributing it more evenly among the people (like cuba) - this is a consequence of the basic economic problem.

obviously by distirbuting a given gdp more fairly you get better equity, greater material living standard for people without raising gdp

you should also look at patterns of govt spending...a gov;t has various ways it can spend its money: a weak or corrupt govt (like many in africa) will waste money on corruption, arms spending, wars or prestige projects; alternatively, with the same gdp a country with good, strong accountable govt will spend money on hospitals, primary education and expanding basic infrasttucture...obviously this is better to improve quality of lives- it is human development, and not just economic growth which is important.

2. for this theres evidence that economic growth does not lead to happiness...the richer we get, the more materialistic we get and less happy we really are. an economist (sorry, name escaped me) suggests s spending cap on conumer goods which rich countries buy as they are "positioned goods" - we measure our happiness by these goods, but this is only relative to what other people have...everybody should just agree to not spend more than a certain amount on such goods

then of course theres evidence that suicide rates are higher in rich countries than in poor ones

and environmental damage/pollution/lack of green space or forrestry which industiralisation brings

contrast with all the benefits of economic growth....make your own judgement as to whether the benefits or costs are greater (theres no right answer)

hope this helps

Reply 3

nero076

yes loftx is right....mention human/political rights as well...chinas economy is booming 10% a year growth but they have no free speech or democracy and appalling human rights record