Term Paper: Relationship Between Population Growth and Economic Development

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Economics

Relationship Between Population Growth

And Economic Development

This report aims to discuss some of the relationships between population growth and economic development. Economic growth is an objective of every nation in this highly globalized economy. Every African, Asian and European nation would love to mimic the United States and China in the sense of economic production. As each nation attempts to grow their own Gross Domestic Product, one would think that each and every citizen of those growing nations would directly benefit in direct proportion to growth. The Gross Domestic Product has most often been used as one of the world's economic growth and well-being indicators. The Gross Domestic Product is used because it represents a total value of all products and services bought and sold. (See Appendix A) However, as we have seen the world's population continue to explode, the Gross Domestic Product as a growth indicator does not always seem to be indicative or accurate of a healthy economy. "Any discussion of the relative merits of a stationary, no-growth economy, and its opposite, the economy in which wealth and population are growing, must recognize some important quantitative and qualitative differences between rich and poor countries and social classes." (Harte & Socolow, 1971) For any economy to grow sufficiently, some of the nation's population must be inadvertently left behind. (See Appendix B) Our existing economic processes can not make everyone rich. In fact, as the worlds population continues to grow, their will be a proportionately larger majority of poor in mass that the rich will have to contend with.

Economic Indicators

The world has gradually and consistently become more of a 'have / have not' scenario as new welfare states emerge in the midst of new emerging economies, new technological expansion opportunities and all new approaches to economic distribution. "The period of modern economic growth gave rise to a phenomenon never before experienced in human history, namely, a sustained, positive rate of growth in real per capita income. Moreover, although income distribution remains unequal to varying degrees in both low- and high-income countries, this income growth was enjoyed by all segments of the societies that experienced it." (Antle, 1999) The problem for these countries and economic blocks such as the European Union is that economic indicators do not always take into consideration the true tie between a population's well being and the economic wealth in the sense of the nation's coffers.

Consider the example of North Korea. The nation consistently produces, in the sense of economic expansionism, extremely valuable weapons and other munitions systems yet they as a nation can not and often do not feed their own children. Ironically, famine throughout North Korea actually makes that nation's Gross Domestic Product rise due to the fact that illness increases Gross Domestic Product as the sick are treated in hospitals that require their own goods and services in order to provide the help. This is just one example of a nation's economics or Gross Domestic Product rising as the quality of life declines and the overall population growth is adversely affected.

To truly understand any national product indicator, there must be the added factor to get a true sense of wealth. "Consider the familiar ratio of gross national product (GNP) to total population (P). This ratio per capita annual product (GNP/P) is the measure usually employed to distinguish rich from poor countries. In spite of its many shortcomings, it does have the virtue of reflecting in one ratio the two fundamental life processes of production and reproduction." (Harte & Socolow, 1971) As was demonstrated by the example of North Korea, it is far more important to ask both rich and poor nations what their quantitative rate of growth is as well as their qualitative growth in regard to the benefits of their overall population.

Housing

Population and economics can be tied in many ways. The simple problem of providing homes for the world's population is just one of the many problems that take on an economic twist. In the United States for example, population growth has affected many aspects of the Housing industry. "In the past 14 years, Ventura County added 133,000 people, or a 17% increase, to 802,000. The population of the county is forecasted by the state to be 930,000 by 2030, and building has been on the decline. If the ratio of people to housing had stayed constant, the county would have added 45,565 housing units to match the population. But only 36,105 units were built -- a shortfall of 9,460." (Macchiarella, 2004) These types of population explosions affect every nation in the world and have led to many unintended consequences. (GEOHIVE, 2005)

The world has to deal with traffic, strains on infrastructure and many other economic factors when planning for the nation's individual communities' growth spurts. The supply and demand factors on pricing have also obviously changed as more people live in or on less space. "The average home price in the county has increased $155,621 since 2000. The median home price in Ventura County was $626,730 in August, up 30.5% from a year earlier. The median is the point at which half the sales are for more and half are for less." (Macchiarella, 2004)

The world economic affects on housing will continue to suffer significant economic setbacks as the population continues to grow. Effects from the continued lack of housing based on the growing population can only get worse. These affects directly impact all emerging or first world nations' ability to provide attractive business climates for employers and employees and adversely affects any possibility of a smooth employment situation.

Economics and Food

Housing is only one aspect of the economic and population expansion tie. The world also needs to feed and cloth all of these individuals. "Agriculture in the twentieth century was characterized first and foremost by technological innovation that began in the industrialized world and spread to the developing countries as the Green Revolution. This revolution in biological, chemical, and mechanical technology made it possible for agricultural production to grow faster than the demand for food despite a rapidly growing world population." (Antle, 1999)

The properties of demand and supply will continue to be greatly altered in the future. The increased demand for food due to population growth adversely changes the dynamics of the operations and processes of the world's agricultural markets. The process of creating and growing food has had to take on a completely new technology based agricultural research and innovation tone; not to mention that the world's ever increasing demand for food has forever reduced the planet's fertility while also altering individual nation's domestic and trade policies.

Think how new problems have stemmed from the increased demand. Mad Cow Disease for example is a disease that is from increased world food demand. Mad Cow and other food supply problems like Bird Flu which was recently seen in the American chicken industry are a direct result of farmers altering their livestock's feeding processes simply because they are desperate to meet the high demands on the food supply. The economic impact of set backs such as Bird Flu and Mad Cow can be devastating to an entire population both economically as well as systematically. Yet, the need for more and healthier food will continue to cause these types of economic and population concerns.

Welfare for the Rich

As the global population has increased, the world has seen a rise in the 'have not' nations as well as 'have not' individuals. Although the solution has often been welfare like programs that are supposed to help people reallocate their income over their life cycle and thus provide a means for economic recovery, economists can clearly demonstrate that their have been far more negative effects on the world's states.

One of the best indicators of social and economic inequality can be measured by aggregate indicators of economic performance and their growth over time. Global, technological and other economic changes and advances of our modern industrialized world economy escalate the problems associated with the expanding population. The world's increasingly welfare dependent populations have grown out of the obvious economic imbalances and can often be tied directly to racial, age and sexual inequalities. Another important concern is that we no longer need to look at South and Central America, Africa or the Asian welfare nations to find our world's poor.

Today, even nations thought to be rich have a growing number of welfare dependent citizens. "Qualitatively, the incremental population in poor countries consists largely of hungry illiterates, while in rich countries it consists largely of well-fed members of the middle class. The incremental person in poor countries contributes negligibly to production, but makes few demands on world resources. The incremental person in a rich country adds to his country's GNP, but his high standard of living contributes greatly to depletion of the world's resources and pollution of its spaces." (Harte & Socolow, 1971)

When using Gross Domestic Product as a measure of rich, consider that nations like… [END OF PREVIEW]

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