• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The costs and benefits of economic growth.

Extracts from this document...

Introduction

The Costs and Benefits of Economic Growth Consider the following quotes: Bradford de Long on the Importance of Economic Growth "Ultimately long-run growth is the most important aspect of how the economy performs. Material standards of living and levels of economic productivity in the United States today are about four times what they are today in, say, Mexico-and five or so times what they were at the end of the nineteenth century-because of rapid, sustained long-run economic growth. Good and bad policies can accelerate or cripple this growth. Argentines were richer than Swedes before World War I, but Swedes today have four times the standard of living and the productivity level of Argentines. Almost all of this difference is due to differences in growth policies working through two channels. The first is the impact of policies on the economy's technology that multiplies the efficiency of labour. The second is their impact on the economy's capital intensity-the stock of machines, equipment, and buildings." The Economist (July 2002) "Flying Blind - Growth and the Environment" "WHAT is the true state of the planet? It depends from which side you are peering at it. "Things are really looking up," comes the cry from one corner (usually overflowing with economists and technologists), pointing to a set of rosy statistics. ...read more.

Middle

Oil is a finite resource that is being used up at a rapid rate. Is it realistic to believe that if the world economy continues to grow and the dependency on oil increases that there will be any oil in a hundred years? If this is true are we therefore reducing future generation's standards of living by consuming an unfair share of finite resources today. If we undervalue the environment and in particular the finite resources at our disposable we risk causing permanent damage to our natural resource base which will place a severe constraint on growth in the future. This includes the destruction of the rainforests for raw materials and the increased burning of fossil fuels in order to generate further output The Mother of Invention An opposite view is that 'necessity is the mother of invention'. For example when crude oil becomes scarce market forces will lead to an increase in the price and that other fuels, which are at present not economical, will become viable and hence will be developed to become efficient. Brazil tried to introduce cars that were run on ethanol in the eighties as a response to high oil prices. ...read more.

Conclusion

A key problem is that it remains extremely hard to quantify in monetary terms the damage that is done to the environment - there are missing markets for many of our most cherished environmental resources. A new approach to pollution measurement and control now being introduced in the UK to many industries is the selling of licences to pollute from the government; through an auction or similar method, companies purchase licences which give them the right to pollute. This not only makes firms more aware of their pollution and forces them to become more environmentally efficient, but also forces inefficient firms out of the market because their costs will be high due to the pollution. Another benefit in this method of controlling pollution goes to the efficient companies who can sell the pollution permits to the inefficient companies, possibly for prices even more than what they purchased them for. The debate over the costs and benefits of economic growth can never be settled conclusively, in part because we simply do not have enough information on both the quantity and quality of our environmental resources - are the environmental pessimists over-stating the damage that growth is doing to our planet? Are economists who are much more sanguine about the impact of growth undervaluing the importance of leaving a sustainable environment to future generations? ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Supply side policies and its economic impact.

    Beyond that broad agreement there are really two separate supply-side groups. The mainstream group stresses the importance of tax incentives in promoting growth, especially by their effect on saving and investment. Similarly, it analyses the effects of tax changes on labour supply, the effects of Social security on saving and retirement decisions and a host of other important issues.

  2. Split Votes: A Nation Divided on the Marijuana/Drug Legalization Debate

    Countless studies have shown that it is no worse, maybe even better, to the body than alcohol and does not have the addictive properties of nicotine. All this said the government still spends billions of dollars to try to eradicate this plant from the nation.

  1. Explain the best ways to gain economic growth and whether it's always good or ...

    The money that is collected by the government from the regulation should be spent wisely on improving the quality of life. This is done by spending more on education, healthcare and transport thus also improving the environment. This will allow us to enjoy better living standards and will allow real

  2. Economic growth in South Korea

    Korean investments in North America and Europe have increased for different reasons but the effects are the same: for the first time, the South Korean state no longer retains full control over the large conglomerates it helped create, and South Korean capital has become global.

  1. China or India? Many companies ask themselves this question. Due to saturated markets, increasing ...

    The state determined the products, the amount, the price and the distribution. Collectivism was emphasized and State owned companies were the rule. But because this system failed to bring the desired economic development, the Chinese government decided to modernize the economy towards a more market orientated system, which would be more open to the world.

  2. Free essay

    From an economic perspective should my council do more to recycle a greater proportion ...

    This is explained by when my parents say they are to busy. This is expected as my father has to go to work while my mother has to look after my little sister at home, I also have a little brother and another sister.

  1. Differences between the standards of living in Slovakia and The Hague

    internets and computers spend money on these facilities and increasing the GDP for the country. People are also happier with life if they own these facilities. I have done secondary research on Slovakia and I tried to compare the same SOL factors.

  2. GDP and Growth

    However, when comparing the 'money' GDP from one year to another does not allow us to know the amount of the outputs the country has produced, as the higher 'money' GDP might not reflect more production but only a higher prices.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work