The idea of economic growth as a key economic policy objective has a long history which can be traced back at least to the mid-18th century when Adam Smith published The Wealth of Nations. However, over the last 50 years, economic growth has arguably become the dominant policy objective across the world and most countries have achieved rapid economic growth. As such, for many governments around the world, economic growth has become the dominant macroeconomic objective because of the various benefits that it might bring to an economy.
However, Joseph Stiglitz, winner of the Nobel Prize in Economics in 2001, has noted that, “GDP is not a good measure of economic performance, its not a good measure of well-being.” (Asia Society in New York, 2008)
Stiglitz, alongside a number of leading economic commentators, has observed that the pursuit of economic growth places a variety of costs upon individuals and society, and may also conflict with other macroeconomic objectives.
Essay Title
Evaluate the extent to which the benefits of economic growth will always outweigh the costs and that consequently economic growth should always be a country’s primary economic objective. 100 marks
Mark Allocation
To access the full mark range, you should be able to
•Demonstrate clear knowledge and understanding of the benefits and costs of economic growth and alternative macroeconomic objectives.
• Clearly apply your knowledge to issues surrounding economic growth and macroeconomic objectives (you may wish to consider the work of Stiglitz, other economists and/or the experience of different economies of your choice to provide some additional context). You may wish to consider the impact that the pursuit of economic growth might have on different aspects of the macroeconomy and different economic agents.
• Provide relevant and precise economic analysis of the benefits and costs of economic growth • Provide an evaluative judgement on whether the benefits of economic growth outweigh the costs and if economic growth should the primary macroeconomic objective of a country.
• Demonstrate effective study skills in the research and presentation of your work.
