Monday 1 March 2010

Does economic growth always lead to increase in living standards?


I think that it is really difficult to give a particular answer on this question, because there are some ways in which economic growth leads to increase in living standards of people and there some disadvantages of it.
First of all,if we look on advantages of economic growth for standard of living, we can take an example of increasing in consumption, consumers can benefit from consuming more goods and services, so if consumption levels are high, prosperity will be bigger. Improving in public services, if tax revenues increase, the government can spend more on important public services such as health and education, if the quality of health services improve, the quality of life will improve as well.
Reduced unemployment and poverty. Economic growth helps to reduce unemployment by creating jobs and services and it is very important because unemployment is the main source of social problems such as crime, however in many countries of EU with high economic growth, in countries such as France, Spain or Italy there are still high levels of unemployment and in this case unemployment is not reduced by economic growth. Also there some disadvantages of economic growth, economic can leads to increase in inequality between people,if we look on UK or USA in 1980 and 1970, we can see the result of economic growth is inequality. Economic growth can lead to more hours of work, it means that if incomes are high, it can lead to people working longer hours and it looks that, people are unable to enjoy their higher incomes.
So, I looked at some advantages and disadvantages of economic growth for our living standards and we can see that there is no a particular answer, but I think that,economic growth leads to increase in living standards,because the economic growth can solve the most important problems with education and health or consumption of goods and services and these things are more important than an inequality or longer working hours.

5 comments:

  1. :)))
    What can you say about this post?:)

    ReplyDelete
  2. Does it reduce income inequality? Have resources been renewed?Are the negative ecological effects minimal?

    If so, then yes.

    BUT.....

    what if pollution increases? what if crime increases? what if inequality widens? what if people are NOT happier? what about diseases of affluence such as stress and obesity? what about working hours?


    Why is your newest data 1980?

    Your post concludes with normative economics!

    Maybe read my blog:

    http://positivepsychology1.blogspot.com/2010/02/delving-into-subjective-well-being.html

    I sent your homework to Amina as you haven't been in touch

    ReplyDelete
  3. Yes, if the economy is rising so do the earning is income means leaving standard automatically risen up? One year ago I drove station wagon and now I drove Porsche, its called increase in living standard. I am a driver by the way.

    Lead Answer in leading way

    ReplyDelete