3.3.2—Consequences of economic growth

Growth can raise incomes, jobs and fiscal capacity but may increase inequality, resource use and pollution.

Outcomes depend on who gains, what is produced and how growth is financed.

Balance benefits, costs and distribution across time.

A mining boom raises exports and wages but can damage ecosystems and crowd out other sectors.

Growth is not automatically development.

Growth can improve material living standards when real income per person, employment, public revenue and access to goods and services rise. Yet production may deplete resources or create pollution, and gains may accrue mainly to owners of scarce assets, widening income distribution. Evaluate the source and composition of growth, real GDP per capita, who gains and loses, environmental externalities and whether investment makes the path sustainable; the same growth rate can therefore produce very different welfare outcomes.