Does the Economy Really Need to Keep Growing Quite So Much?

Does the Economy Really Need to Keep Growing Quite So Much?

Postby Oscar » Tue Nov 22, 2016 11:07 am

Does the Economy Really Need to Keep Growing Quite So Much?

[ https://www.theatlantic.com/business/ar ... th/506423/ ]

Questioning a basic orthodoxy Alana Semuels Nov 4, 2016

Most things don’t grow forever. If a person grew at the same rate for his whole life, he’d become gigantic and perhaps perish (or else rule the world). Yet most economists are united around the idea that the economy needs to grow, always. And at a high rate, for the good of the country and its people.

As the thinking goes, growth of gross domestic product (GDP), which measures the goods and services produced in an economy every year is essential to a country’s stability and prosperity. It is growth that is responsible for each generation being better off than its parents’ generation, economists say. “More growth is better, period,” Robert Gordon, a Northwestern economist, told me.

But some economists are now challenging that view, arguing that it makes more sense to focus on measures of well-being other than growth. After all, despite a growth rate that has averaged three percent over the last 60 years (which is quite robust), there are still 43 million Americans living in poverty, and most people’s wages are essentially unchanged from the end of the Reagan administration. In fact, the median income of households in 2014 was 4 percent lower than it was in 2000, despite positive economic growth in all but two of the years during that time period. For half a century, developed nations have focused on how to make their economies grow faster, hoping that strong growth would improve life for all their populations. But what if growth isn’t the key to raising the standard of living across a society?

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[ https://www.theatlantic.com/business/ar ... th/506423/ ]
Oscar
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