Is a bigger economy a better economy?

Yes & No

Yes a bigger economy is a better economy but it isn’t necessary that it will be better just because its bigger.

Better economy depends on what the economy is dependent on, what it produces, how diversified is it, how resilient it is to outer hindrances and many such things. Just being bigger doesn’t mean that that economy might have those above mentioned characteristics.

Diversification matters

If an economy is diversified then it’s better if it’s big but otherwise being big isn’t of much use. Confused?

Le’me explain

Let’s take economies of two countries Saudi Arabia (S.A) & Taiwan.

Saudi Ar

Yes & No

Yes a bigger economy is a better economy but it isn’t necessary that it will be better just because its bigger.

Better economy depends on what the economy is dependent on, what it produces, how diversified is it, how resilient it is to outer hindrances and many such things. Just being bigger doesn’t mean that that economy might have those above mentioned characteristics.

Diversification matters

If an economy is diversified then it’s better if it’s big but otherwise being big isn’t of much use. Confused?

Le’me explain

Let’s take economies of two countries Saudi Arabia (S.A) & Taiwan.

Saudi Arabia is bigger than Taiwan in terms of land mass & economy & population.

Taiwan is slightly behind Saudi Arabia in terms of economy & population & is outclassed in terms of land mass.

So, can we say that Saudi Arabia’s economy is better than Taiwan’s economy because S.A’s economy is bigger when compared to Taiwan’s.

No.

S.A’s economy is bigger but not better than Taiwan’s. Why? Because S.A’s economy isn’t as diversified as Taiwan’s. S.A’s economy is almost completely oil based, mineral based whose value fluctuates, kind of unstable and reliant on oil.

While Taiwan’s economy is diversified it’s industrialized, it’s based on electronics and many industrial things. Sure thing it isn’t as big as S.A’s but it’s better, stable & more resilient than S.A’s.

So, to surmise bigger is better if it’s diversified & resilient but otherwise bigger isn’t necessarily better.

Depends on how you define 'better', and depends on how you define 'bigger'.

Keynesians say a bigger economy is better, and even if the GDP rises were fuelled by cheap money, increasing credit dependency, high levels of government spending, enormous public and private debt and other structural problems, the economy is better.

Austrians say as long as the rise in GDP is resulting from a healthy credit system, amidst low levels of government spending, sustainable national debt, growing productive power (Fredrich List), and generally sound economic conditions, then the economy is better.

Highlighted the most important parts.

If you were to create more jobs in one specific area, let's say research, you'll also need more people in other areas of expertise to supply them - like experts patent requests or lawyers to fight these patents. It's what you see in the phone industry right now: Apple and Samsung fighting each other over research and patents. You can't just say "what if these professions were used less" because these professions exist for a reason. We need lawyers, we need doctors and this won't change.

Even if these professions would see less demand, you'll have to ask yo

Highlighted the most important parts.

If you were to create more jobs in one specific area, let's say research, you'll also need more people in other areas of expertise to supply them - like experts patent requests or lawyers to fight these patents. It's what you see in the phone industry right now: Apple and Samsung fighting each other over research and patents. You can't just say "what if these professions were used less" because these professions exist for a reason. We need lawyers, we need doctors and this won't change.

Even if these professions would see less demand, you'll have to ask yourself what you're going to do with all the people that work in those areas right now. You cannot just magically create jobs for them, also considering their current education. This would create even more unemployment. That's not to forget that the fact that they contribute to GDP not only means they earn money for themselves, they also spend it and this in turn creates more jobs for other people as well.

Somewhat related: do however keep in mind the drawbacks of measuring the economy's strength by GDP: you won't be able to see the income equality, nor does it take into account the average GDP per capita, nor purchasing power. In some specific cases (look at China who just surpassed the US in terms of GDP, but with a lot of income inequality and a low GDP per capita) a higher GDP does not directly mean that a country is more wealthy which can mean higher GDP is not necessarily better.

Bigger the better because a bigger nation can afford better spending for defense and other useless but necessary funding for self preservation. Islam overran Rome when it was tired.

Generally bigger nations have more resources which have to be converted to wealth by using mostly their own talents. Talent is a human resource. Of course, money is an unlimited resource being merely a token for bookkeeping. Let us start from the beginning, the money balance.

FISCAL DEFICITS -NET IMPORTS = NET PRIVATE SAVINGS, is the money balance for fiat money = paper money = free created money. Let us now look

Bigger the better because a bigger nation can afford better spending for defense and other useless but necessary funding for self preservation. Islam overran Rome when it was tired.

Generally bigger nations have more resources which have to be converted to wealth by using mostly their own talents. Talent is a human resource. Of course, money is an unlimited resource being merely a token for bookkeeping. Let us start from the beginning, the money balance.

FISCAL DEFICITS -NET IMPORTS = NET PRIVATE SAVINGS, is the money balance for fiat money = paper money = free created money. Let us now look at actual data

Note this is the graphic data for USA representing the algebra. You can now see

FISCAL DEFICIT in red positive down balances NET PRIVATE SAVINGS in blue positive up plus NET IMPORT in green positive up. It is clear that the economy ties these tightly. When we see this it seems the economists act in the crisis mode letting the private sector wander and pump money when (blue + green )is near zero. It would be possible to have more red all the time and drag the blue with it.

GDP= govt spending + private spending + net exports and is typically 5 times govt spending. This might be shocking to some to understand how paper money produced at zero cost produces wealth, all of it , in the economy. As I said before paper money is just a token!

All else equal, yes. More to go around in terms of goods and services. Less absolute poverty. Better social rights.

What you refer to with Lawyers and Doctors is more a result of GDP not being a perfect measure of economic strength. As with anything as complex as the economy, there's a lot of complicating factors, but all else equal higher GDP is correlated with tons of positive things, from environmental preservation, human rights, happiness, lowered absolute poverty, etc.

Job creation and competition both help wages and correct inefficiencies in pricing. In this case overefficincy. Economy size creates diversity like nothing else can in the same market.

Not always, but I'd not have included doctors. More doctors mean less sickness, especially if treatment is free, as it is in Britain. Free treatment means a lot of illness get caught early.

eu with the euro close to the pound and dollar