Definition:

Economic growth refers to the increase in the total output of an economy over a given period of time. It is often measured as an increase in gross domestic product (GDP), which is the total value of all goods and services produced within a nation. Economic growth is a key indicator of a country’s economic health and prosperity.

Main characteristics of economic growth:

GDP measurement: gross domestic product is used as the main measure of economic growth. It can be measured in nominal or real terms. Real GDP adjusts nominal values for inflation to give an accurate picture of actual growth.

Long-term process: Economic growth is usually a long-term process that extends over years or decades. It is often expressed as a percentage to indicate the rate of growth over a period of time.

Multi-dimensional phenomenon: Economic growth can occur in different sectors of an economy, including industry, agriculture and services. It can also occur due to increases in productivity, population growth, technological progress or other factors.

Causes of economic growth:

Investment: Increased investment, both by businesses and the government, can stimulate economic growth. Investment in infrastructure, education and technology can increase productivity.

Technological progress: Innovation and technological progress can increase efficiency and productivity in various sectors of the economy. New technologies can optimize the production and provision of goods and services.

Education and skilled labor: A well-educated and skilled workforce can support economic growth as it has the ability to innovate and create high-quality products and services.

Trade: Participation in international trade can promote economic growth by providing access to new markets and resources.

Impact of economic growth:

Increased standard of living: economic growth can lead to a higher standard of living for the population as it increases the availability of goods and services.

Job creation: Increasing economic growth can contribute to the creation of new jobs and reduce the unemployment rate.

Increasing tax revenues: Growing GDP often leads to higher tax revenues, which can be used by the government for public spending and social programs.

Environmental impact: Economic growth can also have a negative environmental impact as it can increase resource consumption and pollution. This requires the implementation of sustainable practices.

Overall, economic growth is an essential part of economic development and contributes to improving living standards and prosperity in a society. However, it is important that economic growth is sustainable and inclusive to ensure that the benefits are accessible to all parts of the population and that long-term environmental challenges are taken into account.