Every year people are worried if economy only grew let’s say 2%. If we already have things good, why does it still need to grow and it’s a bad thing if it stays the same?
In: Economics
There are two forces that we think will generally increase economic activity so long as we avoid total dysfunction. First, the population will grow. If you have more people to make stuff, you should make more stuff (if only because you now have more people who *want* stuff). Second, we will become better at making stuff. Maybe we learn a more efficient way to produce something we already like or maybe we invent something entirely new.
If the economy stayed the same size or shrank, this suggests that there was some negative force that worked against these two “natural” growth mechanisms. Most years this doesn’t happen, so economic growth is what happens when there’s nothing special going on.
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