1.Executive Summary

Economic growth is what every economy tries to achieve for the good of everyone as a whole. Developing, producing more, increased wages, higher levels of education, better and better technologies is what we strive for. But doing all that, does that mean that we are living a better life? Or is it just the ideal of doing better, not really the result that keeps us following the dream of a perfect world. The effects of economic growth are full of positives points such as boost in infrastructures, urban development, higher education, globalisation, creates employment, higher wages for workers, better living standards for the population, and the list can go on and on. But aren’t there any externalities to all of this? There are some of the negative externalities of growing above what the economy can take, reaching the limits where growing is counter-productive. Some of those disadvantages of growth are outlined in this report, such as health problems arising, environmental issues, education issues as well, and how standard of living doesn’t always mean better is getting more.

2.Introduction

“A useful metaphor for production in an economy comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we could eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. Human history teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes generally produce fewer unpleasant effects and generate more economic value per unit of raw material.” (Henderson, D. 2007) This little introduction is a way to say that the more diversified an economy is the fewer side effects it will have to bare. A more sustainable and spread out use of the resources available in the economy.

Back in the days countries tend to produce only the essentials for ‘survival’, most part of the economies were set to produce things like food, clothing, and houses. But nowadays, only small parts of economies are used to produce the so called essentials. The reason behind this change is the industrial revolution in the “late 18^th and early 19^th centuries when major changes in agriculture, manufacturing and transportation had a profound effect on the socio-economic and cultural conditions in Britain. The changes subsequently spread throughout Europe and North America and eventually the World, a process that continues as industriali