Uneconomic Growth

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Neoclassical Growth Theory

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

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

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

    An economic idea that refers to the connections between individuals ...
  5. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  6. Macroeconomics

    The field of economics that studies the behavior of the aggregate ...
RELATED FAQS
  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 ...
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

    What's The Impact On Equities If The Rates Hike?

    The Fed is on course for raising interest rates. True, that leaves the question of when (most likely June or September, but could be later) and how much.
  7. Bonds & Fixed Income

    Why Didn't Quantitative Easing Lead To Hyperinflation?

    Hyperinflation is an exponential rise in prices and tends to occur not when countries print too much money, but is instead associated with a collapse in the real underlying economy.
  8. Investing

    What Has Been Groupon’s Growth Strategy?

    Groupon established a strategy with efforts to become a broader force in the e-commerce world and to expand more strongly into international markets.
  9. Investing

    Are You Ready To Invest In The Tech Sector?

    Tech stocks, particularly those of mature tech companies, are well positioned and offer meaningful upside potential in the near-term.
  10. Investing

    Strategies To Position Your Bond Portfolio

    Fixed income investors may not be able to see them all right now, but important trends are stirring on the investment horizon.

You May Also Like

Hot Definitions
  1. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  2. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  3. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  4. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  5. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  6. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
Trading Center