Economic growth is the increase in the amount 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, in order to obviate the distorting effect of inflation on the price of the goods produced. In economics, "economic growth" or "economic growth theory" typically refers to growth of potential output, i.e., production at "full employment", which is caused by growth in aggregate demand or observed output.
As an area of study, economic growth is generally distinguished from development economics. The former is primarily the study of how countries can advance their economies. The latter is the study of the economic aspects of the development process in low-income countries.
As economic growth is measured as the annual percent change of gross domestic product (GDP), it has all the advantages and drawbacks of that measure.
Read more about Economic Growth: Institutions and Growth, Human Capital and Growth, Inequality and Economic Growth, Quality of Life, Negative Effects of Economic Growth, Prominent Growth Economists
Famous quotes containing the words economic growth, economic and/or growth:
“Economic growth may one day turn out to be a curse rather than a good, and under no conditions can it either lead into freedom or constitute a proof for its existence.”
—Hannah Arendt (1906–1975)
“The chief reason warfare is still with us is neither a secret death-wish of the human species, nor an irrepressible instinct of aggression, nor, finally and more plausibly, the serious economic and social dangers inherent in disarmament, but the simple fact that no substitute for this final arbiter in international affairs has yet appeared on the political scene.”
—Hannah Arendt (1906–1975)
“Here commences what was called, twenty years ago, the best timber land in the State. This very spot was described as “covered with the greatest abundance of pine,” but now this appeared to me, comparatively, an uncommon tree there,—and yet you did not see where any more could have stood, amid the dense growth of cedar, fir, etc.”
—Henry David Thoreau (1817–1862)