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Economic growth


A/ Measures of economic growth (eg) and their shortcomings

Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP, usually in per capita terms.
Source : https://en.wikipedia.org/wiki/Economic_growth

A country’s GDP is the total monetary value of the goods and services produced by that country over a specific period of time.

GDP : a measure of total flow of final good and services produced by the economy over a specified time period (a year or a quarter)

– The pace of eg
(…) A startling fact about eco-nomic growth is the large variation in the growth experience of different countries in re-
cent history. Some parts of the world, like the United States or Western Europe, experi-enced sustained economic growth over a period of more than 100 years, so by historical
standards these countries are now enormously wealthy. This is not only true in absolute
terms (i.e., GDP), but also if we measure wealth as income per capita (i.e., GDP per person).
«In contrast, there are countries where even today large parts of the population live close
to the subsistence level, much the same as Europeans and Americans did some hundreds
of years ago. Also, a group of countries that used to be relatively poor around the time of
World War II managed to achieve even higher growth rates than the western industrialized countries, so their per capita incomes now approach those of western countries. Most ofthe members of this group are located in East Asia, like Japan, Singapore, Hong Kong, andso on. »

Source : http://faculty.wcas.northwestern.edu/~mdo738/textbook/dls_ch11.pdf

B/ What makes an economy grow

« Why are people in the United States, Germany, and Japan so much richer today than
100 or 1000 years ago? Why are people in France and the Netherlands today so much
richer than people in Haiti and Kenya? Questions like these are at the heart of the study
of economic growth »
From http://web.stanford.edu/~chadj/facts.pdf

Growth Drivers

Here are some of the main determinants of economic growth – they apply for both developing and developed countries although the relative weighting that we might attach to each will depend on the individual circumstances facing each country or region.

Growth in physical capital stock – leading to a rise in capital per employee (capital deepening)
Growth in the size of the active labour force available for production
Growth in the quality of labour (human capital)
Technological progress and innovation driving productivity improvements i.e. higher GDP per hour worked
Institutions – including maintaining the rule of law, stable demcracy, macro-economic stability
Rising demand for goods and services – either led by domestic demand or from external trade

Source : http://www.tutor2u.net/economics/reference/economic-growth-an-introduction

It’s a line graph from
It shows the rate of change of GDP of a developed country (The UK) and an emerging economy (India) from 1991 to 2013. In percentage.
The top GDP growth rate
The bottom GDP growth rate
The economic gr
Country with the fastest growing GDP
Country with the slowest growing GDP
The GDP of India grew by 5.5 % in 1992 c1.3 %
Why growth rate differ among countries ?

The economic growth rate (EGR) is expressed as a percentage that shows the rate of change for a country’s GDP from one period to another.

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