Economic Growth
Economic growth is the increase in the 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. Growth is usually calculated in real terms – i.e., inflation-adjusted terms – to eliminate the distorting effect of inflation on the price of goods produced. Economic growth is usually measured in terms of gross domestic product (GDP) or the total value of all goods and services produced in a country in a given year.
History of Economic Growth
The concept of economic growth has been around since the 18th century, when economists such as Adam Smith and David Ricardo began to analyze the factors that contribute to economic growth. Since then, economists have developed a variety of theories to explain economic growth, including the neoclassical growth model, the endogenous growth theory, and the new growth theory. In the 20th century, economists such as John Maynard Keynes and Joseph Schumpeter focused on the role of investment and technological change in economic growth.
In the 21st century, economists have continued to explore the factors that contribute to economic growth, including the role of government policy, the impact of globalization, and the role of innovation. In recent years, economists have also begun to explore the implications of economic growth for inequality, poverty, and environmental sustainability.
Comparison of Economic Growth
| Country | GDP Growth Rate (%) |
|---|---|
| United States | 2.3 |
| China | 6.1 |
| Japan | 0.5 |
| Germany | 1.5 |
| India | 7.2 |
Summary
Economic growth is the increase in the 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. The concept of economic growth has been around since the 18th century, when economists such as Adam Smith and David Ricardo began to analyze the factors that contribute to economic growth. In recent years, economists have also begun to explore the implications of economic growth for inequality, poverty, and environmental sustainability. For more information about economic growth, visit the websites of the World Bank, the International Monetary Fund, and the Organization for Economic Cooperation and Development.
See Also
- Gross Domestic Product (GDP)
- Neoclassical Growth Model
- Endogenous Growth Theory
- New Growth Theory
- Investment
- Technological Change
- Government Policy
- Globalization
- Innovation
- Inequality
