Economic growth is when a country’s economy is expanding and people are earning more, spending more, and generally feeling better off than before. There are many reasons why economic growth is good, but one important reason is that it leads to higher living standards.
The most common measure of economic growth is gross domestic product (GDP). GDP is the total value of all finished goods and services produced within a country’s borders in a given period. It is typically adjusted to a per-capita basis so that it can be compared across countries and states.
One way to generate economic growth is through investment in physical capital. This includes things like building new factories or purchasing equipment, which will increase the long-term productive capacity of the economy. Another way to create economic growth is through an increase in human capital. This could include things like investing in STEM students or subsidizing coding academies, which will lead to a more skilled workforce that is capable of producing more output.
Finally, economic growth can be generated through population growth. This will increase the number of people available to produce economic output, though it will also require more goods and services to keep everyone fed. Economic growth can also be accelerated through technological progress. When new technology allows workers to produce more output with the same amount of labor, it will boost the rate at which economic growth occurs.