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Location: Macroeconomics Unit IV and V - Inflation, Unemployment, and Economic Growth
Discussion: Is there such thing as too much growth?
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kevinhuang |
Is there such thing as too much growth?
Apr 4 2008, 10:35 AM EDT
I am quite sure that there is such a thing as too much growth because it can cause many problems in society. For example, recently there has been too much economic growth and as a result, many typical Chinese citizens that live near the poverty line can't afford pork for their families because of rapidly inflating pork prices. Uncontrolled growth in China has also caused huge amounts of industrial pollution that is harmful to the environment. At what point, under what circumstances is a nation having too much economic growth, how can we determine this and what are various ways that governments can use to prevent excessive pollution and damage to the environment while keeping in mind the welfare of the people?
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yunqimok |
1. RE: Is there such thing as too much growth?
Apr 4 2008, 11:42 AM EDT
Well, there is certainly a point where there is too much growth; that being, after a nation has passed its rate of natural rate of unemployment, and where a little increase in output will lead to skyrocketing inflation. However, in the case of China, Wen Jia Bao said that he wanted to ensure full employment FIRST before caring about inflation. So at this point, growth is still acceptable becasue more people are getting jobs. Of course, I suppose that economists will have statistics to back where the rate of full employment is and ensure that nations do not pass this point. That is why in China, economic problems are easier to tackle, because of its one-party system. It does not have to deal with elections and policies that might seem attractive to the ordinary person which may be in actuality harmful to the economy and nation. In the US, surely part of the reason for the tax-rebates by Bush are to make the republican party more attractive for the upcoming elections.
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J.Chiang |
2. RE: Is there such thing as too much growth?
Apr 8 2008, 9:21 AM EDT
Good point. I guess you can have excessive...well, everything. There are negative consequences to just about all improvements. Didn't America go through a time similar to the times in China right now? Or perhaps the Industrial Revolution in Europe, which caused a lot of pollution as well. I think that as countries are developing, their primary goal is simply to develop; the pollution problems and welfare are dealt with later. Also, as you mentioned, the Chinese who are poor can't afford to buy many items. Does that mean that the growth that we're seeing is only occuring in the upper and middle classes?
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jacqueszhang |
3. RE: Is there such thing as too much growth?
Apr 9 2008, 7:42 AM EDT
It's evident that too much growth CAN be detrimental. China's insane rate of growth at the moment has raised many concerns on inflation rates, which is taking its toll on both domestic and foreign markets. Additionally, we all know nations like China grow at an insane rate, but also produce many negative externalities. Pollution, dumping and the such have all contributed to our world society in a negative way, and such nations refuse to take stringent action to take responsibility for the externalities they place on the world, the cost that they are unwilling to bear simply because it is cheaper for them to place those indirect costs onto society.
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JessicaNg |
4. RE: Is there such thing as too much growth?
Apr 9 2008, 7:58 AM EDT
I agree with the fact that there are certain side-effects that come along with too much growth. However, I don't think there is a cause and effect relationship between economic growth and the inflating pork prices. The reason the pork prices are going up is because the input prices have gone up, not to mention the increased demand for it. Thus, the prices have sky-rocketed. As for the whole income gap issue, I guess we'll just have to wait for any trickle-down effect that will come along with this huge economic growth. As evident in the increased wages in the Southern parts of China, I think that wealth in China has definitely trickled down. The income gap is only a short-term thing. Negative extrenalities is obviously another problem.Hopefully through growth, there will be more time and effort invested into methods of reducing carbon emissions. Do you find this valuable? |
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alicesu |
5. RE: Is there such thing as too much growth?
Apr 9 2008, 9:29 AM EDT
yes i agree that there are negative side-effects to economic growth... however this is far from making the statement that there is such a thing as TOO MUCH growth. growth can cause negative externalities i.e. pollution and unequal distribution of wealth, but does that mean that we should try to STOP economic growth? by all means no! maybe at this point China's economy means that those below the poverty line are suffering, but how would stopping economic growth help them? i actually think that economic growth until the rise in standard of living trickles down to these people, and GDP per capita slowly grows, is the only way to solve these problems. granted economic growth has some detrimental effects, but letting growth continue still does more to fight against these problems than stopping it would.
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MichaelChow |
6. RE: Is there such thing as too much growth?
Apr 9 2008, 10:18 AM EDT
As Kevin already mentioned too much growth is definitely possible to experience. Continuous growth faced by any country can result in massive pollution and waste. Also apart from the enviromental issues there is also the issue with the distribution of the wealth gained during this period of growth. Hopefully this wealth will by itself trickle down to the less fortunate or wealthy. And this whole idea of continuous growth will only lead to the greater gap between the rich and the poor.
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jeewono |
7. RE: Is there such thing as too much growth?
Apr 10 2008, 5:10 AM EDT
We discussed this in class, and there is such thing as too much growth, as too much growth accompanies negative externalities. China is obviously polluted, and apparently global warming has also accelerated since the industrial revolution. People living below the poverty line suffer, but like Alice said, less economic growth is not guaranteed to make their standards of living any higher. We should not let the economy grow too much to the level where our environment is no longer sustainable, yet let the wealth of our economy trickle-down to everyone.
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Chanmin |
8. RE: Is there such thing as too much growth?
Apr 10 2008, 6:36 AM EDT
I don't think there is such a thing as too much economic growth. Economic growth can certainly create many problems and negative externalities. However economic growth is still needed because if there is no economic growth, certain negative externalities may be solved but other problems will be created. Also, economic growth can lead to technological advances which may also help solve certain negative extrenalities. Another reason I believe there is no such thing as too much economic growth is that after a certain point, I think it will be impossible to continuously grow so rapidly. Like China for example, I think after a certain point economic growth will be limited and maybe even times of recession. Therefore I think people shouldn't try to stop economic growth but continuously aim for it.
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HelenChu |
9. RE: Is there such thing as too much growth?
Apr 10 2008, 6:47 AM EDT
When we draw graphs in class, most of the time we just assume that equilibrium occurs at the full employment level of output. But in reality, how do we really know where the economy is at with respect to its true potential? We have the natural rate of unemployment to give us some hints, but this government-generated figure can't still be taken as 100% "natural". I guess my point is that there is definitely such a thing as too much growth, but the problem is that we usually aren't sure what constitutes as "too much" until we experience the full impact of it.
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howardlin |
10. RE: Is there such thing as too much growth?
Apr 10 2008, 9:28 AM EDT
I think we mentioned in class that other things such as polution should also be accounted when looking upon growth. With this in mind, yes there can bu too much growth when looking into the enviormental factors.
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judy_chen |
11. RE: Is there such thing as too much growth?
Apr 10 2008, 9:36 AM EDT
I think there's centainly a point of too much growth. In opinion, China has too much growth now, even though it is still a developing country. However, I've just realized recently that everytime when the airplane was landing, we've gone through a cloud of pollutions! Isn't it terrible? and everytime when Shanghai looks cloudy, that's just all caused by the pollution which block the sunshine! Not just about the environment! Even though China looks like a reach country now, there's still lots of people couldn't afford the high prices due to the inflation. China shouldn't just focus on the GDP of the country but also cares about their people and the environment. The gap between the rich and poor in China is getting bigger and even States shared the pollution could only be caused in China. So I guess there's too much growth for China now, at least they should try harder to slow the growth rate.
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Charlie.Gao |
12. RE: Is there such thing as too much growth?
Apr 10 2008, 9:39 AM EDT
EW. of course not. just kidding. Yea I agree with howard's post that we must also consider the externalities that result due to increased production. Pollution and excreted wastes into the oceans have detrimental effects on the environment. So yes there IS such a thing as too much growth
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TimChu |
13. RE: Is there such thing as too much growth? [THIS IS JEFF YE'S]
Apr 10 2008, 11:24 AM EDT
Yes. Too much growth results in a level of employment higher than the natural rate of unemployment, which is undesirable. Also, with more growth, comes the increased consumption of resources. As resources are already scarce and getting scarcer everyday, this can only last so long before completely going disappearing. Too much growth also results in inflation, another situation economists try to avoid.
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annieycsung |
14. RE: Is there such thing as too much growth?
Apr 11 2008, 11:39 PM EDT
When there is rapid economic growth the situation may be unfavorable for the people. Like Yun Qi said, many families can't afford pork due to rapid inflation of prices. Wages might not be able to keep up with the growing economy, as many have wage contracts; thus, people will not be able to keep up with the rising prices. I agree with Alice that economic growth shouldn't be stopped, as increased GDP per capita would increase quality of life on the long run, but the economy shouldn't be skyrocketing in a short period of time either.
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ChrisFishSeah |
15. RE: Is there such thing as too much growth?
Apr 12 2008, 9:45 AM EDT
This is an interesting question. In fact, too much growth CAN cause widespread economic detriment. China is an excellent example of this phenomenon. The process of excessive rapid growth has in fact been documented and is often referred to as "overheating". The massive amount of market activity and the printing of new money is what causes inflation. This would explain why the Chinese government is actually taking steps to limit the rapid explosion of the economy for fear of an impending recession if things don't cool down to a more stable rate. As it stands now, the threat of too much growth, at least in China, is imminent and very real.As some others have said, there has also been massive environmental consequences for industrializing nations like China and India; when is the last time you saw the blue sky (and by blue sky I don't mean a gray-blue)? If you go by the Yanan road you will see that a lot of the planted bushes are so covered with dust and filth that they appear to be wilted. Don't get me started on Beijing. To qualify what I just said: Growth (and hopefully the resulting innovation) are great things that nations should strive for IN THE LONG RUN. Madly fluctuating prices and production levels in the short run are bad! Do you find this valuable? |
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KristieChung |
16. RE: Is there such thing as too much growth?
Apr 12 2008, 12:02 PM EDT
Along with its positive effects, economic growth has a negative side to it as well. However, economic growth should not be stopped just because there are some side effects. By allowing the economy to continue growing will do more good than to put a stop to economic growth.
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MondGu |
17. RE: Is there such thing as too much growth?
Apr 13 2008, 1:14 AM EDT
Wow goggles, good post. Anyways, back on topic, Is there really such a thing as too much economic growth? I believe not, but too much growth can have a lot of negative externalities, which can result in a variety of problems such as global warming. These problems are usually detrimental to human health and the environment. Which can cause other problems such as a new ice age as illustrated from the movie The Day After Tomorrow. In the end, it depends on your point of view. Too much economic growth can end the life of all human beings on earth, I guess it is hard to define exactly at what point economic growth is way too much to handle. However, we all know that economic growth is crucial in raising the living standards of people, we should think in terms of long-run and protect the environment while we can. Do you find this valuable? |
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agoldman |
18. RE: Is there such thing as too much growth?
Apr 13 2008, 1:53 AM EDT
There is such thing as too much economic growth. As you pointed out, China is a perfect example of such a phenomenon. China's rapid growth has led to skyrocketing inflation, as well as a flood of pollution. The pollution is a negative externality of China's production, and it has a detrimental impact on the environment. We read a good article talking about how China is "choking on success" - that is exactly what too much growth does. However, economic growth can lead to a higher quality of life, more leisure time, and higher productivity. There is no exact number or cutoff point which governments can determine there has been enough growth. They can only anticipate, and try to control the growth as they see fit.
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kl_0511 |
19. RE: Is there such thing as too much growth?
Apr 13 2008, 2:37 AM EDT
I agree that there are negative effects to economic growth. However, like what everyone else has said stopping growth is definitely the wrong solution. Growth has allowed governments reduce pollution, society to be more sensitive to our environment, set aside wilderness, create national parks, clean up hazardous waste and at the same time enable rising household incomes.
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