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Economic Growth - Essay Example

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Economic growth can be well elaborated according to Leubsdorf as the increase in per capita gross domestic product (GDP) or another measure of aggregate income. It is the quantity of goods and services produced. It is often measured as the rate of change in real GDP. …
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Insert Economic Growth Economic growth can be well elaborated according to Leubsdorf as the increase in per capita gross domestic product (GDP) or another measure of aggregate income. It is the quantity of goods and services produced. It is often measured as the rate of change in real GDP. Negative growth is when the economy is in recession and depression and vice versa and that is, the reason and features the article covers effectively. I suggest that an increase in economic growth is associated with improvement in the living standards of people.
It is stated that productive capacity did allow the growth with the felt increase and the development of the capacity of the US nation, which in this sense is what affects the economy. It stresses the importance of agriculture and the notion that manufacturing is central to the entire economy. The article expounds on advocating free trade as a benefit to the US in his comparative advantage, which is the reason I give it a thumbs up in issue articulation (Leubsdorf 1). Leubsdorf affirms that this would finally increase economic growth. In my opinion, entrepreneurship is viewed as creative destruction, which leads to economic growth and are backed up with Fed data on the economic situation.
The situation of the economic growth has a relation to the state of the US labor-time, capital goods, output, and investment. In addition, technological change is more important than accumulation of capital because countries use their resources efficiently but returns on labor and capital are diminishing. David Sterret predicts that increasing capital will lead to increased production creating economic growth (David Sterret 24). Leubsdorf mentions that due to less capital per person in the poor countries, each investment in capital will produce a higher return, therefore, faster growth than the US. Finally, because of diminishing returns to capital, economies will reach a steady state hence improving the living standards of the average persons.
David Sterret suggests that new technology is the solution to this steady state because it improves the level of capital increases for the country to invest and grow. Moreover, the concept of human capital factoring the skills and knowledge as used for productivity is a contributing factor is well elaborated in the article (David Sterret 34). Therefore, I perceive that there are constant returns to capital, and economies come to a steady state with improved standards of living.
The positive effects of economic growth felt according to Leubsdorf in the US, include the income distribution, income inequality, and poverty diminishes due to economic growth. In addition, quality of life to the people is improving with a higher GDP per capita. On the other hand, the negative effects attract the growth to a point where it has improved the quality of life and enhanced sustainable living is a consideration I do not acknowledge and approve in this case (Leubsdorf 1). In my opinion and as backed by Fed data, growth in the US has encouraged the creation of artificial needs causing the consumers within the US states leading a servant like situation in the country’s economy with better standards.
I totally agree with Leubsdorf assertion that there has been witnessed resource depletion due to increased population over the available resources, which have been overused, and therefore causing depletion. In addition, there has been an environmental impact of the natural resources leading to collapse because of growth of the population and global warming is increasing (Leubsdorf 1).
Works Cited
David Sterret, Ashley Bender and David Palmer. "A Business Case for Universal Economic Growth: Improving Economic Growth and Reducing Unemployment by Providing Access for All." Economic Law & Policy Brief 8.2 (2014): 41-57.
Leubsdorf, Ben. Nine Reasons Why Fed Economists Think Americans Aren’T Getting A Raise. WSJ. N.p., 2015. Web. 12 June 2015. http://blogs.wsj.com/economics/2015/06/03/nine-reasons-why-fed-economists-think-americans-arent-getting-a-raise/?KEYWORDS=%27Nine+Reasons+Why+Fed+Economists+Think+Americans+Aren%E2%80%99T+Getting+A+Raise Read More
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