Uneconomic Growth


DEFINITION of 'Uneconomic Growth'

When economic growth produces negative external consequences to the extent that the growth is unproductive with respect to the broader global systems in which it is viewed. Uneconomic growth occurs at a faster rate than what is considered sustainable. Uneconomic growth studies deal with the negative social and/or environmental impacts of too much growth in a broad economic sense (such as a nation's gross domestic product).

The term was popularized by former World Bank economist Herman Daly in the late 1990s, but the core ideas of unproductive growth have a long and varied history.

BREAKING DOWN 'Uneconomic Growth'

Negative consequences include negative impacts to social welfare and environmental damage. These outweigh the short-term value of an extra unit of growth. Uneconomic growth is generally attributed to poor planning, not negative intentions. The term's proliferation has centered mostly on the environmental movement, as data suggests that certain areas of growth, such as an increased use of fossil fuel, has uneconomic consequences.

When a nation increases production at the expense of known damage to the environment, it creates a negative consequence that is felt by not only by that country, but by the entire planet. This same principle can be brought down to the level of a city, company, and even one's own home.

  1. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  2. Neoclassical Growth Theory

    An economic theory that outlines how a steady economic growth ...
  3. Plutonomy

    Economic growth that is powered and consumed by the wealthiest ...
  4. Externality

    A consequence of an economic activity that is experienced by ...
  5. Social Capital

    An economic idea that refers to the connections between individuals ...
  6. Macroeconomics

    The field of economics that studies the behavior of the aggregate ...
Related Articles
  1. Home & Auto

    5 Investment Risks Created By Global Warming

    Climate-change deniers and believers alike would be wise to prepare for the worst.
  2. Markets

    Great Company Or Growing Industry?

    Look at the big picture when choosing a company - what you see may really be a stage in its industry's growth.
  3. Economics

    The Importance Of Inflation And GDP

    Learn the underlying theories behind these concepts and what they can mean for your portfolio.
  4. Bonds & Fixed Income

    Can Keynesian Economics Reduce Boom-Bust Cycles?

    Learn about a British economist's proposed solution to a common economic problem.
  5. Personal Finance

    Five Companies Leading The Green Charge

    Corporations that reduce their environmental footprint anticipate large long-term gains.
  6. Economics

    These Will Be the World's Top Economies in 2020

    Discover the current economic forces that are anticipated to significantly shift the landscape of the world's most powerful economies over the next decade.
  7. Investing Basics

    What Does In Specie Mean?

    In specie describes the distribution of an asset in its physical form instead of cash.
  8. Economics

    Calculating Cross Elasticity of Demand

    Cross elasticity of demand measures the quantity demanded of one good in response to a change in price of another.
  9. Fundamental Analysis

    Emerging Markets: Analyzing Colombia's GDP

    With a backdrop of armed rebels and drug cartels, the journey for the Colombian economy has been anything but easy.
  10. Investing

    How to Win More by Losing Less in Today’s Markets

    The further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
  1. What is socially responsible investing?

    In the financial world, where profit and return are often the priorities of the average investor, the vehicles we use to ... Read Full Answer >>
  2. Who decides to print money in Canada?

    In Canada, new money comes from two places: the Bank of Canada (BOC) and chartered banks such as the Toronto Dominion Bank ... Read Full Answer >>
  3. Is Colombia an emerging market economy?

    Colombia meets the criteria of an emerging market economy. The South American country has a much lower gross domestic product, ... Read Full Answer >>
  4. Is Mexico an emerging market economy?

    Mexico meets all the criteria of an emerging market economy. The country's gross domestic product, or GDP, per capita beats ... Read Full Answer >>
  5. Who decides when to print money in India?

    The Reserve Bank of India, or RBI, manages currency in India. The bank's additional responsibilities include regulating the ... Read Full Answer >>
  6. Is Japan an emerging market economy?

    Japan is not an emerging market economy. Emerging market economies are characterized by low per capita incomes, poor infrastructure ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  2. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  3. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  4. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  5. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  6. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!