How An Economy Grows And Why It Crashes [II]

The first phase of the narrative opens with an island’s most basic way of life. There were just three primitive islanders living there at the time, and they subsisted by fishing with their bare hands; Ai Bo, a local, then created a fishing net to increase productivity and provide everyone with free time; Later, the development of large-scale fishing vessels was also successful, fishing efficiency was increased, islanders had more free time, and the service sector started to expand.

Growth in the economy is a result of capital accumulation. In this tale, I see how more wealth will lead to increased spending, which will stimulate economic growth. Consumption that doesn’t have growth as its foundation will merely be impacted by uncertainty as a result of the decline in savings and won’t help the economy thrive. Many people don’t experience a rise in wealth since they are at home, similar to the epidemic in 2020. Even though they are also buying needs for their daily lives, it hasn’t helped the economy thrive.