How can the world economy grow??

Question

this idea has always puzzled me. I heard on the news that recent IMF reports show the world economy growing slightly. But HOW is that possible. Are the factories making more money bills?

To me it sounds like saying everyone won the race. I mean, I understand if they say china's economy is growing, because China is ONE country.

But how the WORLD's economy grow, who does the world export too.

p.s. I'm a science major, so I just don't get this stuff.

Answer 1

Population growth and increases in general productivity cause the world economy to grow.  It's an aggregate statistic.  Like saying the entire human body grows in height, even though it was actually just specific areas and molecular make ups.

Answer 2

I know most people hate to hear it but outsourcing, globalization, and free trade do alot of good in other countries.  China and India are growing at huge rates as I type this response.  You can measure the world economy, to a degree by the price of oil.  More countries are using oil more oil today, thus showing a growth in the world economy and the result is higher oil prices.

Answer 3

The growth in GDP is not the growth of money; it's the growth in the amount of stuff produced.  Over the long run, there are two ways to increase GDP in a closed system; increase labor increase capital.  Labor tends to increase as the world population increases, but over time, world GDP grows faster than the population growth rate.  That means that capital must increase.  Capital is anything that goes into making a product but is not a part of the product.  Examples include drill presses, staplers, computers, and education.  If there is more capital for each worker, then each worker is more productive, so they can produce more stuff.  So if capital increases, the world economy grows.

So we can all win.  Otherwise we'd be stuck in the stone age.

Answer 4

There is no doubt the computer and all it offers has changed the lives and way people do business. From the Post Office (paying bills-electronically) to purchasing on line, everyone is searching the net for bargains and the net is offering those bargains.

Without overhead costs, like utilities, rents, insurance, additional taxes, etc. many companies can do an effective business from another state. The states need to recognize their tax structure and how its effecting its population.

The world economy is growing due to the streamlining of products and services being offered and sold on line.

As far as China is concerned. There are 1.3 billion people in China and the current Chinese government is looking like geniuses in comparison to the failed policies of Mao Tse Tung and the cultural revolution. China has satisfied much of the needs and raised the economic standard of 300 million of its people. However, the question is the other 1 billion people who live on less than $5.00 per day and in many cases without drinking water...

The technologies and space exploration will see an economic boom yet to be realized and China will have a long way to catch up, economically. Our Defense budget is equal to the budget of the entire world's defense budget...

Answer 5

There is a few reasons that the output of the world economy grows.

First of all, population grows, and even if the population is not becoming any more productive, it grows just because of that.

Now you have to consider how economies grow. GDP ( a measurement of output) is defined as the total value of all goods and services produced in a country in a year. For the world economy to grow, that has to increase overall.

Technology (such as the advent of internet) has allowed that to grow, because it makes individuals more productive.

Just printing more bills doesn't cut it, because then you get widespread inflation. There needs to be work to back up those bills.

I hope that helped

Answer 6

When you add economic value  -- like build a faster computer, dig an irrigation ditch or even add another person to the workforce, you are growing the economy. The amount of output isn't fixed.

Answer 7

it can't