The concept of economic growth is one which has attracted the interest and focus of researchers worldwide. Weil (2013, p. 12) refers to economic growth as a "compelling topic" and a rapidly expanding field, based on the significant increase in the amount of research on this topic. Bolton and Khaw (2006, p.1) state that economic growth is "the most fundamental indicator of an economy's health". They define it as the rate of growth of the national income of a country, measured by the annual percentage rate of change of country's gross domestic product. According to Mankiw (2010), economic growth is one of the reasons why advanced countries have become richer and have improved standards of living. As such, there have been a number of models aimed at studying economic growth, factors that lead to economic growth, and the reasons behind the differing rates of economic growth among nations. Economic growth has also attracted attention because of the positive impact it has on society, as it has been associated with benefits such as increased wealth and standards of living among others. Barro and Sala-i-Martin (2004) state that aggregate growth is possibly the single most important factor influencing individual income levels. However, economic growth has also had negative impacts on society. This essay shall discuss both the positive and negative impacts economic growth has had, using practical examples to illustrate these.
Positive impacts of economic growth 经济增长的积极影响
Improved living standards
When rich countries today are compared to their own history, there is a vast difference in the standards of living (Weil, 2013). As Weil (2013, p. 22) observes, there has been an unprecedented increase in living standards in most parts of the world over the last half century. While the life expectancy of a person born in Japan in 1880 was 35 years, today the life expectancy in Japan has gone up to 83 years. Also, the average worker in the United States would have had to work for 333 hours to buy a refrigerator. Today, a better refrigerator can be bought in 20% of that time by an average worker. While having a reading light in the night was once a luxury which only the very rich could afford, today about 75% of the world has access to electricity in their homes (Weil, 2013, p. 22).
Reduction in poverty
Studies have shown that there is a positive relationship between economic growth and the rate of poverty reduction in developing countries (Pernia and Quibria, 1999; Tisdell, 2008). Barro and Sala-i-Martin (2004) report that there has been a significant increase in the global per capita GDP from 1970 to 2000 with the average person clearly getting richer over time. They note that there has been a shift in the world distribution of income to the right (See figures 1 and 2 below) and a positive income evolution in most countries worldwide. This has meant that people are able to afford more and can improve their quality of life. Weil (2013, p.23) also notes that countries such as South Korea have made the transition "from pauper to an industrial power in a single generation".
Figure 1 The World Distribution Of Income In 1970
Source Barro and Sala-i-Martin (2004, p.8)
Figure 2 The World Distribution Of Income In 2000
Source Barro and Sala-i-Martin (2004, p. 9)
Education
While there is a lot of literature on the effect of education on economic growth, with considerable evidence showing that education has a positive impact on economic growth, reverse causality, i.e. the effect of higher economic growth on education may, as The World Bank (2007b, p. 4) notes "be at least as important as the causal effect" education has on growth. Ast
