EC140 Lecture 12: Chapter 25
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Rising living standards: normally measured by real per capita gdp, median income may be a better measure of common living standards. Higher incomes lead to many better outcomes: increases in consumption, better health status and higher life expectancy, easier to redistribute in a growing economy, more attention to environmental issues. Higher investment requires less consumption: trade off between consumption now and consumption in the future. Economic growth may bring less stability: creative destruction, structural unemployment. Growth is not sustainable: increases in economic growth commonly lead to increased use of environment resources, arguments that environmentally friendly growth is possible are fairly weak. Growth may not increase overall well being: relative income matters, overall well being may fall if growth leads to inequality. Economic growth may not be the right measure: productivity may be closely related to well being. Growth in the labour force: growth in population or labour force participation rate.
