What Are the Characteristics of a Good Economy?

Guido Cavallini/Cultura/Getty Images

While debates continue to rage, economic growth and a strong middle class are generally viewed as essential for a good economy. Widespread purchasing power can help as well. Many also place innovation as a top priority for fostering economic development.

In general, growth is viewed as essential for a good economy. While growth typically causes inflation, it also allows people to have a better quality of life. A strong middle class is often viewed as a goal and driver for growth in developing nations, and giving the middle class more purchasing power is often viewed as a necessary goal for the developed world.

However, opinions differ on what other factors are necessary in a strong economy. The libertarian point of view prioritizes individual economic freedom; low taxation, they argue, allows people who make more money to spend it on what they want. Progressive models tend to favor keeping the gap between the rich and the poor small and providing services for the middle and poorer classes.

A strong economy can have a number of positive impacts on societies. Wealthier governments can spend more money on basic research; space travel has led to a number of scientific breakthroughs. A strong economy can also spur innovation in the private sector.