The Trap of Unhealthy Economic Growth

Abstract

The paper puts into discussion the necessity of having a healthy economic growth in order to achieve real economic and social progress. The analysis is focused on EU, Euro area and Romania and proposes a new approach in solving the connection between GDP and real welfare. The literature review is the base for defying and implementing a new model. It covers: GDP, Private consumption, Public consumption, Gross fixed capital formation and Terms of trade of goods. The whole analysis leads to the conclusion that the economic growth in Romania is not based on economic performance, but on consumption. This process will have unfortunate repercussions on the Romanian economy in the future