/sci/ - Science & Math

[Anonymous No.2308241]

What is "economic growth", exactly? I can't get Wikipedia to give me a straight answer. All I know is that if economic growth ever stops, or goes negative, it's somehow an utter disaster.

Is this growth meant to continue forever? If so, how?

[Anonymous No.2308265]

>>2308241

Economic growth is a statistical term. It doesn't mean your life is getting better or you're getting happier, it just means the nation's GDP is greater than it was the year before. By calculating GDP ratios, you've already gone through determining your economic standing.

[Anonymous No.2308288]

>>2308241
Basically the economy either experiences inflation or deflation.

When inflation happens everyone complains a lot
When deflation happens everyone complains a lot

The only difference is that a deflating economy actually hurts people. Inflation is an unavoidable consequence of growth, which is good. Now, the reason our economy crashed a few years ago is because the government didn't properly regulate corporations, so banker 1 was like:

Ok I'll make bad loans and put them in with good loans and sell them as an insurance thingy
Banker 2 says
Ok I'll buy bad insurance thingys with corporate money and use them to MULTIPLIFY MY WORTH!!!! ok my worth is multiplified everyone's richer hurray

Loans stop paying properly(because people got loans with bad income), everyone realizes that all the various institutions have no real assets because they've been leveraging them through accounting miracles, money well goes dry and everyone dies.

So yeah, economic growth is nice and all as long as you don't make a point of using it as your only goal. Without proper regulation everyone dies.

[Anonymous No.2308311]

>>2308288
>>2308265

Okay, so... okay.

Is growth tied in any way to actual increase in production, or to increase in population?

You say that growth means that the GDP is higher than the previous year. That means more objects are produced and consumed than previously. That seems totally unsustainable. Oh god, what are we going to do, we're DOOMED.

[Anonymous No.2308339]

>>2308311

Well, the luckily our civil engineers keep building more and more urban sprawl, thus solving the problem once and for all.

[Anonymous No.2308393]

>>2308288
>Inflation is an unavoidable consequence of growth
NOPE. Deflation is a consequence of growth. If more products and services are being produced, the same amount of money must be used to buy more things, making every dollar more valuable.

The only reason we have long term inflation is because the money supply is increasing.

[Anonymous No.2308400]

>>2308311
Yes, and the problem before was that our worth was very much due to our perceived worth. Leveraging assets makes us have more money, more money means our time is worth more, which means we can buy from other countries. Yay!

Until we realize we don't actually have anything and suddenly 5 bucks an hour doesn't sound so low.

[Anonymous No.2308407]

>>2308393

That's quite interesting. Ideally the money supply should grow at the same rate as the overall economy.

[Anonymous No.2308410]

>>2308393
Right, bad definition of terms. Inflation is a consequence of growth at full potential, or growth by borrowing.

Fractional reserve banking is a necessity for our economic system, so the creation of money faster than goods is necessary for our functioning at full capacity.

[Anonymous No.2308416]

>>2308288
>Ok I'll make bad loans and put them in with good loans and sell them as an insurance thingy
>Banker 2 says
>Ok I'll buy bad insurance thingys with corporate money and use them to MULTIPLIFY MY WORTH!!!! ok my worth is multiplified everyone's richer hurray

This perfectly made post explains everything about the financial crisis you need to know. Hell, you could submit this as an article in a journal of economics, and they would easily accept it.

[Anonymous No.2308427]

>>2308416
or better yet you could make it a political cartoon, and then multiplify it into every newspaper in the country.

[Anonymous No.2308428]

>>2308416

It sounded good to me as well.

[Anonymous No.2308514]

Just skimmed over some of the responses and saw a lot of definite answers here, and there really isn't one. The main reason for this is "economic growth" gets bandied about bby a lot of economists, politicians, laymen, financiers, and everyone else and often times they point to different economic indicators (some favor stuff like GDP, others employment rate, some the delta of per capita worth, some use market indicies, other things and combinations thereof).

The most general answer I can think of is market expansion through most possible vectors. Ideally, it can be sustained forever. In practice, nope. But growth is also the pisser of our economy these days. Most of the time, when you hear a company talking about taking a loss for the year or quarter, they still made an asston of money, but they did not hit their growth projections (as in they only made 20% more this year instead of the expected 30% more). This is not always in reference to profit (it can also be holdings like property or other companies, employment, or really anything with the company that a value can be ascribed to) but it usually is a reference to profit...economic growth is an attempt to aggragate these fluctuations along with those of individual households.

[Anonymous No.2308528]

>>2308427
Done.

[Anonymous No.2308541]

>>2308514

Companies and investors alike tend to invest based on their growth projections. I wouldn't be surprised if their losses actually offset their profits to where they did take a hit. Well, that is unless you're a big ass company with all sort of safeguards and insurance.

[Anonymous No.2308547]

>>2308528
but he isn't multiplifying anything :(

also in the end the banker has to die too

[Anonymous No.2308932]

>mfw need to plot 3D scatter plots
...and gnuplot is an ancient pain in the ass fucking command line tool that can't do shit

what does /sci/ use ?