Uneconomic Growth

Uneconomic growth is in some ways an oxymoronic concept but it starts to get to the heart of the notion that GDP growth is an umbrella concept that aggregates all output regardless of long-term consequences or cost, and that not all factors that contribute to growth are positive. Some positive growth inputs may have very negative long-term consequences. The concept of uneconomic growth is often used in an environmental context, where goods produced from exploiting the environment end up degrading the environment and, over time, end up costing more than their contributory value through the creation of waste and pollution back into the environment from which they were produced. Other examples of uneconomic growth include naked speculation that creates growth on paper but adds little economic value, especially where accelerated price appreciation turns to massive downside volatility. The concept of uneconomic value is also applied to themes such as post-war reconstruction spending or reconstruction following natural disasters.