Why Is Economic Growth Important? | The Blk Projek
Why Is Economic Growth Important?
The economic success of a country is largely measured by the economic growth it generates. Hence the strong focus on this. That is no coincidence: economic growth is crucial because it helps to achieve some of the other objectives – full employment, balanced public finances. To give an example: a certain degree of economic growth is needed to prevent a rise in unemployment if more people enter the labor market (young people, women, migrants) or to create new jobs to compensate for the jobs that disappear due to efficiency improvements in the companies.
If the cake does not get bigger, the redistribution issue becomes much more pressing.
Economic Growth Explained
Economic growth is the support on which the economic system rests. Take that away and there are major stability problems. Economic growth is needed to maintain prosperity as the population – of a country, of the world – grows. In 1950 there were 2.5 billion people on the earth, in 2000 there were 6 billion and today 7.6 billion. If there had been no economic growth, poverty would have increased considerably. Thanks to the strong growth of the world economy, poverty is substantially reduced even with a strong increase in the world population.
Economic growth contributes to political and social stability. If the cake that can be divided becomes larger, this avoids tensions between countries, between population groups, between generations. If the cake does not get bigger, the redistribution issue becomes much more pressing.