Johnny Ch Lok

How Environment Pollution Can Cause Economic Recession Johnny Ch Lok

Furthermore, in both China and India's case, recent increases in manufacturing has affected their environment and economic variable changing is more frequently. These two countries are useful when observing the causation and correlation between carbon dioxide emissions and gross domestic product because of their recent and very dramatic economic development. China and India show the clearest relationship between these two variables, and could be predictions for many countries on the same economic and manufacturing industry development, like countries in Africa and southeast Asia. I shall attempt to give evidences to explain that when one country encounter serious environment pollution environment, it will bring further economic recession effect later in possible. The Factors that can cause recessions may include as below: (1) High interest rates are a cause of recession because they limit liquidity, or the amount of money available to invest. (2) Another factor is increased inflation. Inflation refers to a general rise in the prices of goods and services over a period of time. As inflation increases, the percentage of goods and services that can be purchased with the same amount of money decreases. (3) Reduced consumer confidence is another factor that can cause a recession. If consumers believe the economy is bad, they are less likely to spend money. Consumer confidence is psychological but can have a real impact on any economy. (4) Reduced real wages, another factor, refers to wages that have been adjusted for inflation. Falling real wages means that a worker's pay check is not keeping up with inflation. The worker might be making the same amount of money, but his ppurchasing power has been reduced. The National Bureau of Economic Research (NBER) defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales." A recession is also said to be when businesses cease to expand, the GDP diminishes for two consecutive quarters, the rate of unemployment rises, and housing prices decline.