Economic Growth
The sustained increase in the production of goods and services in an economy over time, typically measured by growth in real GDP.
Economic Growth
Economic growth represents the expansion of productive capacity and output in an economy over time. This fundamental economic concept serves as a key indicator of societal progress and development.
Core Components
Production Factors
- Physical capital accumulation
- human capital development
- technological innovation advancement
- natural resources utilization
Measurement
The primary metric for economic growth is the percentage increase in Gross Domestic Product (GDP), particularly when adjusted for inflation. Other important indicators include:
- Per capita income
- Industrial production indices
- productivity measures
Types of Growth
Intensive Growth
Occurs through increased efficiency and productivity, driven by:
- Technological advancement
- Improved education systems
- Enhanced business processes
- Better resource allocation
Extensive Growth
Achieved through increased input quantities:
- Population growth
- Natural resource exploitation
- Geographic expansion
- Capital accumulation
Drivers and Enablers
Policy Framework
- Stable monetary policy
- Sound fiscal policy
- market regulation
- property rights protection
Institutional Factors
Challenges and Limitations
Sustainability Concerns
- environmental impact
- Resource depletion
- climate change
- Intergenerational equity
Distribution Issues
- income inequality
- Regional disparities
- social mobility
- Access to opportunities
Modern Perspectives
Alternative Measures
Recent discussions have expanded beyond traditional GDP metrics to include:
- sustainable development indicators
- quality of life measures
- well-being economics
- Environmental accounting
Growth Paradigms
Emerging frameworks emphasize:
Policy Implications
The pursuit of economic growth influences various policy areas:
Economic growth remains central to economic planning and policy-making, though contemporary approaches increasingly recognize the need to balance growth with other societal objectives like sustainability and equity.