I often see statements in the news from economists saying things like “only 0.2% growth reported, which might have bad effects on the economy”. In my eyes infinite growth is simply impossible when we have finite resources, or is that a misconception from my part?
Edit: thank you for all the detailed an in-depth answers! Learned a lot of new things 🙂
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Deflation means there is a reduction in demand which means a reduction in goods and services produced to match.
If a country experiences population growth but sees a reduction in production, scaling back up that production to match takes time especially if investors are hesitant in an instable economy. Families and immigrants will be left without those goods and services in the meantime. Which in some cases means a significant reduction in quality of life.
Steering towards slow and steady growth is a conservative strategy to keep away from recessions and instability.
There is value in stability. People can somewhat reasonably make long term plans or goals in thei lives.
We learned this lesson harshly in the great depression.
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