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. Social Capital

    An economic idea that refers to the connections between individuals ...
  4. Green Economics

    A methodology of economics that supports the harmonious interaction ...
  5. Pigovian Tax

    A special tax that is often levied on companies that pollute ...
  6. Externality

    A consequence of an economic activity that is experienced by ...
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. Investing

    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 reach our monetary goals can be overlooked. We know that mutual funds ...
  7. There are many ways to rank the word's most powerful companies. Looking at market value, brand value or sales revenue are all methods used to rank the biggest companies in the world.
    Economics

    Most Powerful And Influential Public Companies In 3 Metrics

    There are many ways to rank the word's most powerful companies. Looking at market value, brand value or sales revenue are all methods used to rank the biggest companies in the world.
  8. A look at China's plan to control population growth and how it could change going forward.
    Economics

    China's One-Child Policy Explained

    A look at China's plan to control population growth and how it could change going forward.
  9. Economics

    Why does inflation increase with GDP growth?

    Examine the relationship between inflation and GDP, and why GDP growth leads to higher prices. Explore the effects of uncontrolled inflation and GDP growth.
  10. Economics

    How did World War II impact European GDP?

    Understand the effect of World War II on the European gross domestic product and what foreign and domestic factors influenced this change.

You May Also Like

Hot Definitions
  1. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  2. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  4. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  5. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  6. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
Trading Center