(Bonus question: how does an economy stops growing? If it’s possible)
EDIT: Thank you all for your help. This is def more helpful and fun than good ol’ lessons.
In: Economics
For most of recent history, the “natural” state of an economy tended towards growth. This is mainly because a) populations have been rising meaning more consumers and producers and b) technology improves productivity/efficiency.
If by “steady state” you mean the level of activity (rather than the monetary measure of activity) then this is not really likely until population stops growing and/or most people start demanding “less” in their lives.
The difference is the quality of life for the population, in the most general term. If an economy stops growing (as measured by goods produced/consumed) while population continues to rise, then the average person has to consume less.
It might be that in the next 50-60 years most of the wealthier populations/countries will have undergone shrinkage in numbers. It is also possible that automation redefines what it means to be productive.
Can an economy stop growing? Yes. Wars, famine, natural disasters, disease can and have shrunk economies before. Is a “steady state” a likely outcome? Again, probably unlikely – most economies either grow or shrink and there is no “natural” tendency to be at a steady state.
Economists also study things that cause economies to go in recession – these could be systemic (monetary, fiscal mismanagement, corruption, breakdown of society etc) There are also things like “bubbles” because some actions, while rational for the individual, is irrational for the aggregate. (very much a tragedy of the commons)
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