Invention and Engineering

Economic growth

In economics, economic growth is an increase in the quantity and quality of the economic goods and services that a society produces. It can be measured as the increase in the inflation-adjusted output of an economy in a given year or over a period of time. It focuses on the economic activities of a country. The rate of growth is typically calculated as real gross domestic product (GDP) growth rate, real GDP per capita growth rate, GNI per capita growth or median income growth. The "rate" of economic growth refers to the geometric annual rate of growth in GDP or GDP per capita between the first and the last year over a period of time. This growth rate represents the trend in the average level of GDP over the period, and ignores any fluctuations in the GDP around this trend. Growth is usually calculated in "real" value, which is inflation-adjusted, to eliminate the distorting effect of inflation on the prices of goods produced. GDP per capita is the GDP of the entire country divided by the number of people in the country. Measurement of economic growth uses national income accounting. Economists refer to economic growth caused by more efficient use of inputs (increased productivity of labor, of physical capital, of energy or of materials) as intensive growth. In contrast, economic growth caused only by increases in the amount of inputs available for use (increased population, for example, or new territory) counts as extensive growth. Innovation also generates economic growth. In the U.S. about 60% of consumer spending in 2013 went on goods and services that did not exist in 1869.

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See also

• ▸Andreas Mandelis
• ▸Arctium
• ▸Digital electronics

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