Economic growth Flashcards
Benefits of sustained economic growth
-Increased standard of living
-Job creation
-Reduced poverty
-Increased government revenue
-Investment opportunities
Costs of sustained economic growth
-Inflation
-Resource depletion
-Income inequality
-Financial instability
Benefits of sustained economic growth on current living standards
-Increased income and employment
-Improved infrastructure and services
-Technological advancements
-Reduced poverty
Costs of sustained economic growth on current living standards
-Environmental concerns
-Income inequality
-Inflation
Environmental limits to economic growth
-Resource depletion
-Climate change
-Biodiversity loss
-Water scarcity
The environmental kuznets curve
It is a theoretical framework that suggests a non-linear relationship between environmental degradation and economic development. It shows that as a country’s economy grows, environmental degradation initially worsens but after a certain level of economic development, the environmental quality begins to improve.
Stages of the environmental kuznets curve
-Low income stage
-Middle income stage
-High income stage
Low income stage
In the early stages of economic development, countries focus on growth and industrialisation. This often involves increased pollution and environmental degradation which worsens environmental quality.
Middle income stage
As economic growth continues, the negative environmental impacts peak. Environmental degradation is at its worse due to increased industrial activity, urbanisation and consumption.
High income stage
Beyond a certain level of income the theory suggests that the society becomes more concerned with environmental issues. They invest in more sustainable practices and environmental quality begins to improve despite economic growth.
