Explain the key issues in relation to the developing nations concerning the consequences of economic growth

To begin, it is extremely expedient and beneficial if meticulous definitions and what processes of the topic at hand are given. In this second LDC essay, the main focus is on the Consequences of Economic Growth. While a country may grow wealthier therefore, during the growth of its real productivity, it does not essentially mean that it will expand. Economic Growth on the other hand, occurs where there is an increase in the productive potential of the economy and is best calculated by the boost in a country's real level of output over a period of time, for example the increase in the actual Gross Domestic Product. Economic growth is caused by improvements in the quantity and quality of the factors of production that a country has available: Land, Labour, Capital and Enterprise. On the contrary economic decline may take place if the quantity and quality of any of the factors of production falls as each one of the factors rely heavily on each other. Growth is obviously a good thing. This is the set view of economic growth, as it tends to be treated as the main “stepping stone” of economic policy for both developed and developing countries. However, it may not always be supreme. Possible costs and consequences of growth can include the following key aspects.

The major problems have been required to be defeated by following the model of sustainable development; “economic growth that can continue over the long-term without non-renewable resources being used up”1, which many economies now aims for. On the right, a basic diagram of economic growth presenting the actual output, the ideal output, and the projected output. The distribution of wealth within a country is mainly concentrated on the affluent and economically strong and thus economic growth inflates income distribution, especially in poorer countries and effects crime rates and social behaviour.

  (Triple A online Textbook)

The distribution of wealth within a country is primarily concerted on the rich and economically strong and thus economic growth inflates income distribution, especially in poorer countries and effects crime rates and social behaviour. “Rio has one of the highest crime rates in Brazil, exacerbated by high inequality in incomes” . Figure 2, the bar graph on the right, labels the recent estimates of the Gini Coefficient in selected “unequal” countries. The graph indicators shows, the lower the number out of 60, the more equal the distribution of income throughout the eight South American countries. . Figure 2 shows hat both in developing and developed countries inequality exists. From the graph it could be understood that inequality exists around the world and is not concentrated on the poorer nations. One aspect of income distribution is the progression of the tax system, designed so that people on the higher incomes pay a higher proportion of their income tax, in which the money will be redistributed to the poor. For many developing countries this is not the case and this form of redistribution might not occur. “Rapid economic expansion is also creating growing imbalances that threaten to undermine financial stability and continued growth.” 4

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In addition to negative externalities, income distribution, and lack of sustainability in an economically developing country, the loss of non-renewable resources outcomes show the more they want to produce, the more resources they need to do that. The faster these resources become utilized, the less time they will last. The Loss of land is another vital consequence as increased output puts further pressure on the available land. This may gradually corrode the available countryside. “Lifestyle changes are seen as the push for growth has in many areas put a great deal of pressure on individuals, especially in lower developed countries.” 4 ...

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