Economic growth can be defined as the rise in the output of an economy or a rise in national income over a given period of time. Economic growth can be beneficial to the economy but needs to be managed as so to not incur opportunity costs. This essay will discuss whether the benefits out weigh the costs of economic growth, or whether the costs exceed the benefits.
An advantage of economic growth is that it is likely to cause a rise in living standards due to an increase in wealth per capita of individuals in an economy. Economic growth will also create more jobs as companies will expand and new ones will be formed that will employ people, therefore unemployment may also fall. A rising demand and output will encourage investment in capital and therefore help to move towards a sustainable level of economic growth, opposed to a short-term growth. There may be a potential for an economy to reduce the environmental impact, due to the fact that the economy will have more money, therefore they may be able to spend this on new, cleaner technologies that will allow for there to be less environmental damage.
On the other hand, a potential cost of economic growth would be that it could lead to inflation if there is a large increase in demand, but there is not as much of an increase in supply, this has been seen to happy in countries such as the BRIC economies. Another disadvantage of economic growth would be that a fast rate of growth in the economy is that it can cause negative externalities such as a higher level of noise pollution and a higher amount of air pollution and road congestion. It may also cause a large rise in household and industrial waste. Growth that in the long run leads to a higher level of environmental damage is that it could reduce the long term stability of economic growth if natural resources are being used up in order to generate the economic growth, such as industries involved in de-forestation and over-exploitations of animal stocks. Many...