Collaborative Economy: Pros and Cons . This will be brought about by the many industries that will be emitting its wastes in rivers and the machines that will produce a lot of noise as the working is own hence pollution will be much. When there is economic growth, then there will be an increase in the consumption of goods that are produced as people will be able to purchase for the goods which will, in turn, make the sales to be high hence improving the economic growth of a country. First, the tax cuts were phased in through 2009, too slowly to boost the economy. Economic growth in a country lowers unemployment in a country. Supporters of fast economic growth believe it helps poorer people by making goods and services more available at an increasingly affordable price. Development of Infrastructure: It helps in improving the country’s infrastructure means of transport, airports, and services. Excessive government expenditure: Economic growth may trigger excessive government expenditure where the government goes on a spending spree because the economy has money that can be spent. 10. Growth may lead to a rapid destruction of rain forests, the over-exploitation of fish stocks and loss of natural habitat created through the construction of new roads, hotels, retail malls and industrial estates. Encourages investment: Economic growth encourages investment since the purchasing power of the people in the economy has increased. Huge industrial waste: Economic growth means there are more and more industries that discharge waste into the environment such as rivers and land causing environmental degradation. This is what forms the backbone of an economic system. Cons . People can be able to afford a lot for very little which means there is more money to be invested. Tariffs work in a way that imposes a tax on top of a good that is imported to a nation. Reduction of government borrowing: Economic growth means the government will reduce its borrowing which also means the deficit is likely to reduce making more money available in the economy. This is very informative post. Once economic growth happens it leads to increased activity in the economy of the country which in turn gives government good source of income through taxes and other revenues. The goal of economic development typically to create wealth, not private wealth per say but community wealth. Inequalities of income and wealth: There is a high likelihood of wealth inequalities in cases of economic growth where the rich become way richer and the poor end up being poorer. Higher growth tends to enable governments to be able to afford welfare states and offer a minimum level of production. When there is high economic growth, the government will be able to invest in the education of its own country hence they will provide better education to its citizens. personally i think this question can be a little hard to answer, as economic growth can be caused by a lot of things, and as such almost everything has exceptions. Suppose the economy used to have productivity growth of 3%. Pros: 1. Really. The strategy is beneficial in increasing domestic consumptions. 1. Higher living standards – i.e. Then real GDP increases from Y1 to Y3, and therefore, we get strong economic growth. © 2020 Prosdecons.com. Let’s take a look at the pros and cons of TNCs. Growth and the Environment: The Sustainability of Economic Growth. The Pros And Cons Of Economic Growth 784 Words4 Pages Economic growth is the increase in the capacity of the economy to produce goods and services, making the production possibility curve of an economy shift outward (Fig 1.1). As many industries will be constructed, they will require people to work in and this will cause congestion of both people and vehicles as everyone will be on the move to go and work in the specific industry. 3. 3. Although China is working hard to stimulate her domestic demand and consumption, it has long relied on exports and investment to catapult her economy, this model is only beneficial on the foreign market. Higher inflation: Economic growth may sometimes lead to inflation. Increased health standards: Economic growth means the government services will be improved including health and education which avails affordable healthcare to all and sundry. 2 Answers. 5. In this article we will discuss 4 major types of economic systems and we will look at the dynamics involved in each one of them. rising HDI) Employment effects – sustained growth stimulates jobs and contributes to lower unemployment rates which is turn helps to reduce income inequality. Economic growth from 1900 to 1970 helped reduce levels of inequality in the US and Europe. You have entered an incorrect email address! One of the pros of economic growth includes a higher standard of living for the citizens. EGTRRA didn't end the 2001 recession for several reasons. Does not guarantee happiness: Economic growth does not always guarantee happiness in the sense that more money in the pocket does not restore lost relationships and so on. Increased consumption may cause shortage: Increase consumption due to increased purchasing power may cause shortage of products which eventually causes inflation. Any chance you’d include our actionable guide on “4 types of economic systems” (https://www.cleverism.com/types-of-economic-systems/) in your awesome article (https://prosancons.com/business/pros-cons-economic-growth/)? The risk of this is that the government risks floating too much money in the economy which may also cause inflation. Have a lovely day and keep up the good work. When there is more money in the economy and the demand increases, the supply of products has to much the demand. Collaborative economy and micropreneurship are among the most talked of topics of the decade. Cheap and easy to collect Calculated from a formula which all countries use, therefore it… 3. Rather than liberalizing international capital movements, the world should strengthen capital controls in order to ensure global financial stability Economic growth of a country is the process in which technological revolution, industry, infrastructure and institutional activities are experiencing continues improvement. An obsession with economic growth is a cancer on society that’s eating up our planet and natural … Tourism is responsible for generating many different jobs within a country, thus being a hugely positive influence on the economy. But, there are some major disadvantages of rapid growth that have been noted by many economists. People in favor of trade protectionism often see it as a way of enabling the growth of domestic industries and creating a high wage economy, which spreads benefits around. Inflation will come in whereby there will be the production of a lot of goods hence affecting the prices negatively and it may also make the industries produce low-quality goods due to unhealthy competition. There will be high life expectancy in the country as people will be able to get accessed to social amenities such as hospitals and they will have enough food to sustain its members hence people will not die out of simple diseases and lack food hence high life expectancy. The information contained in the prosdecons.com is purely informational and educational only. China’s Economic Growth. Of living: TNC focus on developing the economy is a top priority for them the backbone an! 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