I hear a lot of people talking about economic growth, as in over time there is more value in the economy. For example, index funds like SP500 are growing consistently over decades a. On the other hand, economy is just buying stuff from other people with money they got from another person they produced stuff for, which he then sold to other people for money, like a closed loop. If that’s the case how is more money added to the system? how can the market as a whole grow instead of some companies profiting on the expansion of others?
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Money and value are two different things. You can measure value in the amount of money you would potentially be able to sell it for but it is not the same thing. A farmer may have $100k worth of grain in his grain bins after harvest which is a lot of value but no money. When you work you are creating a lot of value by making valuable things or providing valuable services. This is how the economy grows and get more value over time. But that does not mean there are more money in the enonomy, just more valuable stuff that you may sell for money.
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