The percentage of world economies experiencing scarcity varies depending on the definition that is used. When economists talk about a “scarcity economy,” they are referring to one in which there is not enough production to meet demand. This can happen for many reasons, including war or natural disasters.
For example, if you compare America’s GDP per capita (roughly $55,00) with that of Somalia ($1,700), it would seem like we live in an abundant society. However, due to oil-related sanctions against Iraq and high prices of fuel at the pump during the Gulf War (1991), as well as destruction caused by Hurricane Katrina (2005), Americans experienced a disruption in their economic activity and became more aware of how difficult life could be when resources are scarce.
Scarcity Economy
This blog post will explore the percentage of world economies experiencing scarcity by examining what economists define as a “scarcity economy.” This is not just an issue in developing countries — financial crises and natural disasters have disrupted many developed nations’ economic activity, resulting in periods where people were aware that they could be struggling with limited access to basic necessities even in places like America or Norway.
The first section of this post will examine how percentages vary depending on which definition is used for “a scarcity economy” – whether it’s based on production capacity or demand levels within individual country borders. The second section will discuss the sources of shortages — including wars and natural disasters such as hurricanes–as well as some underlying causes and effects.
