Week 8: Once you have completed your practice final project (if you elected to do so), test your understanding of all the topics in this course by completing and submitting the Python final project p
7
Understanding Economic Growth
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Define the sources of economic growth and give examples of each
There are several sources of economic growth which include;
Investment in human capital: Investing in human capital by training and educating workers is likely to equip people with the required skills and knowledge required to carry out particular tasks. After learning individuals are likely to use the skills in workforce, thus increasing labor productivity. By increasing productivity, more trade is likely to take place between nations, transforming low-income into high-income nations.
Technological Advancements: Technological advancements are likely to result in economic growth as a result of increased efficiency of developing products. This can be justified where the widespread of automation technologies in manufacturing activities has led to an increase in productivity, resulting in economic development. (Wen et al. 2021)
Investment in Physical capital: Investing in physical capital such as equipment, infrastructure and machinery is likely to facilitate economic growth by increasing production. With increased production, organizations are likely to sell more products thus gaining more funds that can be used in other projects thus facilitating economic growth.
Natural resources: Natural resources include resources such as oils, minerals and agricultural land, which play a crucial role in the nation’s economic output. Governments such as Russian Federation have achieved economic development by mining economic resources such as crude oil and exporting it resulting in economic growth.
Proposal Policies of promoting economic growth
There are several policies that can be implemented to achieve economic growth, which include;
Policy proposal for human capital: Government and organizations should implement subsidized educational and vocational training to provide equitable access to skill development. Skill development is likely to lead to a highly skilled workforce, allowing workers to learn new trends in the market associated with productivity thus resulting in economic development.
Policy proposal for technological advancements: The government should offer grants and incentives to public and private entities to encourage research and development. This proposal should also be provided to businesses to illustrate the importance of conducting research and allow them to play a crucial role in economic development.
Policy proposal for physical capital accumulation. The government and organizations should implement public-private partnerships where they can fund the development of their infrastructure project. After implementing public-private partnerships, they can identify the infrastructure they need to boost their production by allocating necessary resources to achieve economic growth and development.
Policy proposal for natural resources. The government and entities should establish strict regulations and taxes on how natural resources should be extracted to reduce environmental degradation. This proposal should be implemented with an aim of facilitating sustainable use of natural resources, thus achieving economic development. (Rice, 2021)
Downsides of Economic growth and policies to reduce negative impacts of growth
Despite economic growth having positive impacts, it is associated with several impacts which makes it essential for economic growth to be monitored. Some downsides of economic growth include;
Environmental degradation: Rapid environmental growth is commonly associated with increased pollution and also depletion of natural resources. To minimize the impact of environmental degradation, governments should implement policies such as carbon taxes, which should be aimed at reducing emissions and also using cleaner technologies for production.
Income inequality: Rapid economic growth is likely to result to income inequality due to how people work. The issue of polity inequality can be addressed by introducing tax reform programs which can be used in funding social welfare programs. Tax reform programs are likely to facilitate equitable access to education and employment, resulting in income equality.
Social unrest: Rapid economic growth is likely to lead to social tensions thus increasing instances associated with social unrest. Social unrest can result in other factors, such as inadequate access to economic opportunities and disparities in wealth distribution. Social unrest can be addressed by investing in community development programs, thus addressing problems that can arise as a result of grievances. (Bekun et al. 2019)
Cultural emulsification: Economic growth driven by globalization is likely to contribute to the erosion of cultural diversity and also the emulsification of cultural practices. As a consequence of cultural emulsification, indigenous cultures are likely to face marginalization and become extinct, resulting in the loss of cultural heritage. Cultural emulsification can be addressed by implementation of cultural preservation programs that can be used to protect indigenous rights and heritage.
Conclusion
From the assignment, I have gained a deeper understanding on how economic growth is likely to affect society and the environment. Despite the significant impacts, it is possible to formulate policies that can be used to solve the complexities of economic development and foster sustainable development to achieve economic growth. One of the policies that can be adopted is the use of a holistic approach of economic policymaking that considers both short-term and long-term effects of the environmental consequences of economic growth.
After implementing the policies, it is essential to identify the positivity and negativities associated with them and the constraints they may have, thus prioritizing social justice and environmental sustainability. By learning the impacts of economic growth, I now understand that economic growth is not about numbers and there is the need to give everyone a chance to succeed by prioritizing social equality, which will fight against social instability despite economic growth. In conclusion, I understand the roles I am required to play in preventing environmental degradation regardless of economic growth.
Reference
Bekun, F. V., Alola, A. A., & Sarkodie, S. A. (2019). Toward a sustainable environment: Nexus between CO2 emissions, resource rent, renewable and nonrenewable energy in 16-EU countries. Science of the total Environment, 657, 1023-1029.
Rice, R. E. (2021). Biodiversity conservation, economic growth and sustainable development. In Biodiversity of ecosystems. IntechOpen. Retrieved from: http://dx.doi.org/10.5772/intechopen.99298
Wen, J., Mughal, N., Zhao, J., Shabbir, M. S., Niedbała, G., Jain, V., & Anwar, A. (2021). Does globalization matter for environmental degradation? Nexus among energy consumption, economic growth, and carbon dioxide emission. Energy policy, 153, 112230.
