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Is there an idea of "natural growth"?

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    Posted: 10 Oct 2010 at 23:52
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Post Options Post Options   Thanks (0) Thanks(0)   Quote fantasus Quote  Post ReplyReply Direct Link To This Post Posted: 09 Oct 2010 at 06:04
 I am not sure "development" maskes things clearer. In many cases the question wether or not there is quantitative growth may be a question with a definitive answer. I definately often hear "growth" given high priority among politicians, media and professionals. If some country or branch "misses" it, it is described as a situation that needs a "cure". Such a point of view may be causing more or less permanent frustration in the "dismall science", since there is not such a road to eternal "booms".
Perhaps we would be better of if such periods of less economic activities in the markets were accepted.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Reginmund Quote  Post ReplyReply Direct Link To This Post Posted: 09 Oct 2010 at 00:59
The word "natural" always struck me as unnecessary. Nothing can exist without being natural, that anything could ever be "unnatural" baffles the mind, as it implies defiance of the laws of existence.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote kristi.gill Quote  Post ReplyReply Direct Link To This Post Posted: 08 Oct 2010 at 22:27
Its more pertinant the contrast between economic development and economic growth: The first is a fundamental change in society (as a movement away from dependence on low income to the agricultural industry or production of an economy based services) second, that just means more.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 19 Mar 2010 at 20:48
Insofar as economic growth is 'natural' it's a function of, and intertwined with, population growth. The higher population growth, the more goods and services you need to produce, but also the more goods and services you are able to produce (if you hold technological development and climatic conditions constant9.
 
The economy also grows (more goods and services are produced and consumed) as a result of technological development if you hold population constant. I don't know however if you would call that 'natural'. And of course changing climatic conditions affect growth one way or another, as does the discovery of new and the exhaustion of old raw material sources.
 
The natural increase in population involving an increase in economic output also generally necessitates an increase in money supply in constant terms, but the arbitrary nature of monetary value makes it somewhat irrelevant whether that is masked or accompanied by inflation or deflation, though politically and socially it of course makes a difference. With a finite monetary base like gold, economic growth is necessarily accompanies by deflation, with the consequent benefit to the holders of money.
 
Organic growth is a different concept, being usually used in connection with the growth of firms, rather than of the economy. http://moneyterms.co.uk/organic_growth/ The concept was developed by Edith Penrose http://eprints.qut.edu.au/12838/
 
 
 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Zagros Quote  Post ReplyReply Direct Link To This Post Posted: 12 Mar 2010 at 23:52
Don't mean to be pedantic, but the correct term is 'organic growth'.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote drgonzaga Quote  Post ReplyReply Direct Link To This Post Posted: 12 Mar 2010 at 23:26
It's jargon devised for the service of statistics as if abstractions could be explained in terms of the human life-cycle! Conclusions all depend upon just what point you wish to sell and can explain it with numbers. In a way it is a form of utopic thinking: work is happiness. Personally, I think Genesis got it right: the sweat of our brows is punishment for transgressionEvil Smile!
 
No one dare utter that "growth" is but a function of inflation!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote fantasus Quote  Post ReplyReply Direct Link To This Post Posted: 12 Mar 2010 at 17:33
Like so many widespread beliefs and assumptions the idea of "natural growth" are not very often explissively stated. Rather it seems often to be an undebated premise in discussions about economic issues. How else could it be that often european economies are described as being "trapped" by "low growth" as if there was a "disease"? Many of the worries seems to be without substance if there is not such an "silent consensus".
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: 12 Mar 2010 at 15:05

Well, money itself is largely a construct -- even a fiction -- anymore, so I don't know how one could predict growth as a "natural" phenomenon over time. It is a very interesting question, and I shall be interested to follow this thread as it develops to hear the answers posited by our learned forumers.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote fantasus Quote  Post ReplyReply Direct Link To This Post Posted: 12 Mar 2010 at 08:06
Originally posted by Parnell Parnell wrote:

Natural growth? I think's its more pertinant to contrast between Economic development and economic growth: The former implies a fundamental change in society (Such as a movement away from low income reliance on the agricultural industry towards a manufacturing or service's based economy) and the latter, which simply means more (Literally more) of the same.
There amy be an end to both though, and none of them are as "natural" as perhaps some tend to believe.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Parnell Quote  Post ReplyReply Direct Link To This Post Posted: 12 Mar 2010 at 07:14
Natural growth? I think's its more pertinant to contrast between Economic development and economic growth: The former implies a fundamental change in society (Such as a movement away from low income reliance on the agricultural industry towards a manufacturing or service's based economy) and the latter, which simply means more (Literally more) of the same.
http://xkcd.com/15/



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Post Options Post Options   Thanks (0) Thanks(0)   Quote fantasus Quote  Post ReplyReply Direct Link To This Post Posted: 12 Mar 2010 at 05:36
I sometimes seems that public debate on economic issues are based on an underlying assumption there are or at least should be some "natural growth". What is the origin of such an idea and what is it based upon - if anything at all? From a long term historical perspective the whole idea seems very far from realistic.
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