The Costs of Economic Growth
- If an economy is producing on its productive potential, then the only way for it to increase output is to switch from producing consumer goods to capital goods.
- In the short run, this means less consumer goods will be made, but in the long run, it will enable more to be produced as the productive capacity of the economy will increase.
- Economic growth can cause damage to the environment and depletion of non-renewable resources, which would hinder future generations’ growth
- Economic growth may also reduce the quality of some people’s lives
- A growing economy will require workers to adopt new skills and change jobs, which some people could find stressful