Whether Infinite Economic Growth Is Possible

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Whether Infinite Economic Growth Is Possible

Answering not the question of whether infinite economic growth is possible, one should understand its constituent parts. I believe that endless economic development is impossible in practice, and for a number of reasons. The main component of the idea of endless growth is exponential growth. Exponential growth is any growth that accrues like interest payments. The implications for economic growth seem clear, with the global economy growing by a few percent a year (Traore & Sene, 2020). So far, this has not created any insurmountable problems. But the growth of a few percent per year is exponential growth, which could create a whole host of issues in the future.

Economists are well aware of this, and one of the first to worry about exponential growth in the economy was the Reverend Thomas Malthus. Malthus was a man who died almost two hundred years ago, but before his death, he created the so-called Malthusian trap (Balatsky, 2019). Malthus was worried about the exponential growth of the population, and his calculations were irrefutable. However, technological progress has been faster than population growth in the short term. Recently, population growth has slowed sharply, and there is every reason to believe that the worlds population is stabilizing.

There is an opinion that even if population growth stops, economic development, expressed in GDP, will continue. I believe that although Malthus was not right in his time, modernity is different. Exponential growth has its limits and is permanently terminated by economic crises, as in the Roaring 20s (Daniel & Steege, 2020). The economy is overheating; consumption cannot continue indefinitely. The market cannot increase its growth forever, as history has shown, demonstrating that endless economic growth is impossible.

References

Balatsky, E. V. (2019). Consensual institutions for neutralize of Neo-Malthusian trap. Journal of Economic Regulation, 10(3), 023036.

Daniel, V., & Steege, L. T. (2020). Inflation expectations and the recovery from the Great Depression in Germany. Explorations in Economic History, 75, 101305.

Traore, A., & Sene, N. (2020). Model of economic growth in the context of fractional derivative. Alexandria Engineering Journal, 59(6), 48434850.

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