Ancient Grudge
Its all in this life
What are the benefits/costs of economic growth?
Does economic growth only help a small percentage of the population?
Does economic growth only help a small percentage of the population?
Economic Growth
- Thread starter Ancient Grudge
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In the short run, it helps the rich the most, but in the long run, it benefits everybody.
Edit: As to the costs, GDP growth is often a direct correlate of saving. If one is to assume this as true, then economic growth is essentially trading short term consumption (basically how well-off you are in the short run) for long term economic well-being. If no one saved any of their income,then the economy would boom in the short run, but there would be serious long run consequences, as investment would decrease substantially thanks to the lack of saving.
Edit: As to the costs, GDP growth is often a direct correlate of saving. If one is to assume this as true, then economic growth is essentially trading short term consumption (basically how well-off you are in the short run) for long term economic well-being. If no one saved any of their income,then the economy would boom in the short run, but there would be serious long run consequences, as investment would decrease substantially thanks to the lack of saving.
Ancient Grudge
Its all in this life
Cheers yom.
What are the long run benefits? Lower unemployment etc? Or are people just generally richer?
What are the long run benefits? Lower unemployment etc? Or are people just generally richer?
I would just say generally richer, but lower unemployment should certainly be an indirect result. If companies and people are doing better, then they can afford to expand their businesses, which often requires increased employment. This situation is not necessarily the case, however. For instance, Chile experienced a high GDP growth rate after Pinochet came to power, but, at the same time, wages fell and unemployment rose (4.3% in 1973 and 22% in 1983). Unemployment eventually fell, though.Ancient Grudge said:
Source
Edit: Sorry for the late reply, but CFC went down on me for a good while, and I just went and ate my lunch instead of waiting
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Ancient Grudge
Its all in this life
No problem food is always better then economics 
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Are there any other positive indirect results of economic growth?
Sorry for all the questions just am intrested in the asian tiger econmoies that boomed then failed at the moment.
.Are there any other positive indirect results of economic growth?
Sorry for all the questions just am intrested in the asian tiger econmoies that boomed then failed at the moment
.Then instead of creating your own thread, you could have just revived my newly-buried "Rapid Industrialization" threadAncient Grudge said:No problem food is always better then economics
Are there any other positive indirect results of economic growth?
Sorry for all the questions just am intrested in the asian tiger econmoies that boomed then failed at the moment
.The Asian Tigers' economies were based on trade surpluses and high savings rates. The trade surpluses were used to encourage investment and infuse money into the economy, and high savings rates also often lead to GDP growth as they encourage investment. The reason their economies aren't doing so well right now (and didn't do well in 1998-9) was because the trade situations that exist(ed) aren't (weren't) favorable. I could be wrong though.
Trade-peror
UET Economist
In capitalist economies, economic growth's benefits are unevenly distributed, but tends to help the enterprising rich more than the laboring poor because the rich usually control the economic activity associated with their industries. Unfortunately, laborers are often traded as commodities on the "labor market" as simply another input necessary for production. Ideally, economic growth results in higher production and incomes for the rich, who then accordingly pay the laborers more. Often this is not the case, however, and that is why capitalism rarely lessens the gap between the rich and the poor. This was true in Asian economies before the rapid industrialization of the past decade or two, but is much more the case now.
allhailIndia
Deity
The benefits of economic growth also depends on how transparent the government is and whether social security mechanisms exist.
What does happen in the long term is that more people move from being in the lower class to the middle class, rather than an absolute reduction in "inequity". The rich won't stop being rich, but the poor will also stop being poor. In the short run this is difficult to attain, but in the medium to long term, it is possible.
What does happen in the long term is that more people move from being in the lower class to the middle class, rather than an absolute reduction in "inequity". The rich won't stop being rich, but the poor will also stop being poor. In the short run this is difficult to attain, but in the medium to long term, it is possible.
Trade-peror
UET Economist
Actually, this may get a little relatavistic, because those at the lowest economic strata may still end up being defined as the "poor," even as their wealth increases compared to earlier periods. In addition, the "cost of living" and other factors that tend to dampen perceivable increases in net wealth will rise along with larger economies, often in the form of inflation. The result is that the poor are still poor in their own economies (which is really what matters), but perhaps rich in others.
BasketCase
Username sez it all
A thousand years ago, most people worldwide were farmers. Today, only somewhere around 20 percent of Americans are involved with food production and distribution. We get more food per farmer per unit time. This allows the rest of us to produce other things: television sets, cars, sunglasses, nuclear weapons, computers, the Heroic Epic.....
True growth is that which allows the same amount of human labor to produce more real goods. Money is merely a medium for trading whatever real goods exist.
Technologies and ideas which increase the effectiveness of human labor are the only real form of economic growth.
True growth is that which allows the same amount of human labor to produce more real goods. Money is merely a medium for trading whatever real goods exist.
Technologies and ideas which increase the effectiveness of human labor are the only real form of economic growth.
Trade-peror
UET Economist
Very true. Money is indeed only a medium by which we can exchange existing wealth, rather than create any. In fact, this is why I have been advocating trade as the primary form of wealth production in Civ4, something I have formulated into a far-reaching game model I call the Unified Economic Theory! Anyway, I got a little carried there...
Innovations in technology and distribution of scarce economic goods are essentially the only ways to increase economic productivity, and prevent the dreadful situation British economist Thomas Malthus predicted--that the world population would continue to grow relentlessly and eventually consume everything...
Innovations in technology and distribution of scarce economic goods are essentially the only ways to increase economic productivity, and prevent the dreadful situation British economist Thomas Malthus predicted--that the world population would continue to grow relentlessly and eventually consume everything...
Shaihulud
Deity
Hmm im do economist but ill take a shot at that question. Imho Economic growth is fueled by confidence and optimism than real production, in 1998 the industries and production n employment in SE Asia was fine. There was economic growth as well beacsue ppl were optimisticAncient Grudge said:Sorry for all the questions just am intrested in the asian tiger econmoies that boomed then failed at the moment
. Since their economy was doing so well many countries owe money in the form of US dollar. They thought it would be fine since they had confidence their currency will rise versus US dollar. Now some ppl started to notice the discrepancy and decided to borrow massive amount of US dollar within the region and sell asian currency. At the same time US investment companies decides to devalue SE asian companies 
.Well this started a panic which evolved into the economic crisis. Only those countries that have a large enough reserve to prop up their currency was able to go through it relatively unscathe. Imho a good example of economic warfare, it would have been admirable if not for the misery it has caused
.allhailIndia
Deity
@Shaihulud
China and India aren't exactly growing only on optimism
There are actually MORE factories and call centers coming up. Real incomes ARE going up and fewer percentage of people are below the poverty line than below. In fact, in the last decade, the poverty line in India had to be raised upwards twice to reflect this growth.
China and India aren't exactly growing only on optimism
There are actually MORE factories and call centers coming up. Real incomes ARE going up and fewer percentage of people are below the poverty line than below. In fact, in the last decade, the poverty line in India had to be raised upwards twice to reflect this growth.
allhailIndia
Deity
@Shaihulud
China and India aren't exactly growing only on optimism
There are actually MORE factories and call centers coming up. Real incomes ARE going up and fewer percentage of people are below the poverty line than before. In fact, in the last decade, the poverty line in India had to be raised upwards twice to reflect this growth.
Despite the Crisis in 1998, most of the South East Asian countries have rebounded and are starting to show strong growth.
China and India aren't exactly growing only on optimism
There are actually MORE factories and call centers coming up. Real incomes ARE going up and fewer percentage of people are below the poverty line than before. In fact, in the last decade, the poverty line in India had to be raised upwards twice to reflect this growth.
Despite the Crisis in 1998, most of the South East Asian countries have rebounded and are starting to show strong growth.
Shaihulud
Deity
Sorry I wasn't clear enough, the optimism is part of an investor confidence. This confidence makes ppl spend more rather than hoarding it, this allows the economy to grow. SE asian economies are startin to pick up, but slowly imho this is to prevent further "attacks". If ppl believe that it will grow they will invest in it.
One thing which I don't really understand is why asian economies are seen to be more unstable than western ones? All the wealthy ones have a massive amount of reserves to support investor confidence, from other threads i learnt that many western economies seems to be in debt but seems to be doing fine!
One thing which I don't really understand is why asian economies are seen to be more unstable than western ones? All the wealthy ones have a massive amount of reserves to support investor confidence, from other threads i learnt that many western economies seems to be in debt but seems to be doing fine!
Mise
isle of lucy
@Shaihulud:
When you say "people spend more" money, I assume you mean manufacturers spending money on better production facilities, and investment to increase output, rather than consumers buying products (instead of saving/investing their money). The SE Asian growth was largely due to high personal savings rates -> lots of capital available to manufacturers -> better/more production facilities -> increased output -> export (as opposed to internal consumption, since people are saving/investing not buying stuf) -> GDP growth.
When you say "people spend more" money, I assume you mean manufacturers spending money on better production facilities, and investment to increase output, rather than consumers buying products (instead of saving/investing their money). The SE Asian growth was largely due to high personal savings rates -> lots of capital available to manufacturers -> better/more production facilities -> increased output -> export (as opposed to internal consumption, since people are saving/investing not buying stuf) -> GDP growth.
Shaihulud
Deity
Yes when I meant that ppl invest money into companies rather than using it on luxuries. I don't know about the saving rates though, do you mean the money in the bank is used to fuel economic growth? I know a large amount of savings goes into investment funds n such.
Economic growth basicly means more stuff and services created with the same amount of work (relative view in %) or with more work (absolute in $). Only lasting way is by better producitvity (automatization, IT, beter organization,..)
Whom it serves depends on political system (taxation, social transfers, wages, control,..).
Whom it serves depends on political system (taxation, social transfers, wages, control,..).
Shaihulud
Deity
If Economic growth is the ratio of production versus cost then most Asian countries would be the racing.
