Economic Growth

Economics research papers assist the student in understanding variables such as economic growth. It is helpful to have a sample of a paper on economic growth to help you understand what drives economic growth.

The term "economic growth" is an umbrella concept that refers to an increase from one designated time period to another in an economy's ability to produce a variety of goods and services. This measurement can be made in a variety of ways, often taking into consideration rates of inflation between the two designated time periods. The most common ways to measure economic growth is comparing a country's gross domestic product or gross national product. Economic growth is not simply producing more of something, as differing goods and services have different values. If the production of automobiles decreases but the production of computers increases, there is unlikely to be economic growth, as the latter is of less value than the former. Thus, economic growth is seen in the value of the increased production of goods and services, not just in the increased quantity.

The concept of economic growth can be seen at the national level, but it can also often be correlated down to the individual level. Generally speaking, during times of economic growth, the increase in productivity seen at the nation level is mirrored at the individual level; with a more productive economy comes a more productive individual laborer. This is not always the case, though, because economic growth can also be influenced by increases in population through birth rates or migration from other countries. The driving factors behind economic growth can vary, but traditionally include innovative developments, the creation of superior products, particularly with regards to technology, specialization, and an increase in the labor force, as mentioned.

Economic growth is viewed as desirable and necessary for competitive positioning in the global marketplace. Conversely, economic growth is blamed for permanent damage to the environment in the form of air and water pollution, deforestation, and the unrecoverable loss of natural resources. Beginning in the 1950s and continuing in the following decades the U.S. federal government passed new laws aimed at protecting the environment. These measures lowered pollution levels yet experts still warned unrestricted economic growth could destroy the nation's natural resources. To date, the debate on whether economic growth helps or harms the environment has not been resolved.

Some experts contend economic growth is necessary for the development of pollution control mechanisms. Proponents of environmental optimism claim the air and water is much safer today than it was just decades ago. In the United States new environmental friendly laws enacted in the last five decades make it much more difficult for companies to pollute the environment and remain profitable. These laws include the Federal Land Policy and Management Act of 1976, the Surface Mining Control and Reclamation Act of 1977, and various Clean Water and Clean Air Acts and Amendments.

The theory of economic optimism is supported by statistics. In developed and industrialized countries the environment tends to be cleaner while sanitation in developing countries tends to be low. The richer a country gets the more money it has available for environmental improvements. Developed countries have sewage systems, water treatment systems, and policies that regulate air and water pollution. According to one expert, as a country reaches a per capita of $8,000 the environment benefits. This improvement occurs:

1. Humans begin to adapt their behavior according to environmental restraints;
2. Environmental quality is viewed as a luxury,
3. Improvements are made to adapt the environment to suit human needs.

Economic growth provides the means to development resources that protect natural resources according to the theory of environmental optimism. Not too long ago activists and scientist warned the worlds natural resources were quickly being gobbled up and the forests that provided these resources destroyed. To protect natural resources developed countries developed alternative sources. For example, rubber is now collected from rubber plantations rather than forests. Laws pose tighter restrictions that protect endangered wildlife and approximately twenty percent of the world's fish supply comes from fish farms. Timber plantations make it less necessary to destroy natural forests for lumber. Advances in technology make it possible to replace telephone lines with wireless and fiber optic systems. Moreover, humans tend to congregate in areas, which reduces stress to natural environments. In urban areas where people congregate laws protect damage to the environment. Without economic growth it would be impossible to dedicate the funds needed for the creation of alternative resources.

As countries become richer they tend to migrate from economies based on manufacturing and heavy industry to economies supported by service and information industries. Service and information industries pollute the environment less and require fewer natural resources. In the European Union greenhouse admissions decreased by 0.5 percent between the years of 2001 and 2002. One of the factors associated with this decline is lower-economic growth in manufacturing industries. Unrestricted population growth harms the environment by increasing the demand for natural resources. However, as countries develop birth rates tend to level off. Developed countries are more likely to promote birth control and to spend more on education. As the population in developing countries level off following economic growth the demand on resources declines at the same time the populations desire for a healthy environment increases. Both of these factors contribute to the argument that economic growth is beneficial to the environment.