Economic growth is a common topic of discussion among economists and policymakers, but it is also an important concept for everyone to understand. Economic growth means that people, businesses, and governments are earning more money, spending more money, and generally feeling better off than they were in the past.
The most popular measure of economic growth is gross domestic product (GDP), which takes into account the market value of all the goods and services produced in a country during a certain period. But GDP doesn’t tell us much about the quality of these products. For example, it doesn’t take into account that a person who spends their time caring for their children or an elderly parent contributes to the economy just as much as someone who works full-time at a company.
Moreover, GDP doesn’t take into account the environmental costs of producing these goods and services. For instance, the construction of a new power plant may increase GDP but also increases air pollution and potentially leads to health problems like asthma for people living nearby.
This is why it is important to remember that economic growth is not necessarily beneficial for everyone. There is a limit to the benefits that can be obtained from economic growth and it’s crucial for policymakers to focus on ensuring sustainable and environmentally friendly economic growth. If we don’t do this, our current unprecedented economic gains will slow dramatically.