Thanks for your question. First, let me request that if any of the
following is unclear or if you require any further research please
dont hesitate to ask me for a clarification.
You asked Is ZERO GNP GROWTH for a country sustainable over 10
years or more?
Assuming full employment and no population growth, the answer is a
resounding yes (in fact, with negative population growth, lifestyle
could even improve under 0% growth
). What you will in fact witness
in such a case is a steady-state economy.
Fear of 0% growth, however, is driven by the expectation that
populations in most of the world do continue to grow this is further
exacerbated by the fact that at the point-of-entry to such a scenario
we are not, in fact, at full employment (popularly defined as a 4%
unemployment rate). This is why, from an economists perspective, a
0% GNP growth scenario is called a recession. See excellent
presentation with graphs at
In most economies, therefore, 0% GNP growth would not be sustainable.
As the population continues to grow, unemployment will rise and demand
for good and services will drop creating a cycle that will drive the
economy to negative growth. One can imagine that as this cycle
continues to play out civil unrest will increase etc.
Another concern in such a situation, especially for capitalist
economies, is deflation as demand drops, prices fall and wreak havoc
on financial markets that are dependent on earnings growth; without
growth in earnings equity prices will drop and investment in the
economy will shrink again, further impacting the downward slide.
So, again, in theory, given well-defined economic characteristics at
the onset of such a period, 0% GNP growth could be sustainable. But
in reality it would be rare for all such factors to coincide.
I hope this response adequately addresses your request. Please let me
know if you are in need of additional information concerning this
"zero gnp growth"