If you have entered this publication, it is because you are interested in knowing more deeply the meaning of Economic Growth. Throughout this article we will cover most of the concepts related to it. In order to classify and express each of the definitions that are given to this concept.
In a very summarized and simple way. We can define economic growth as the increase in value given to different services (and goods in general). Which are generated within the economy of a nation or region. The way in which economic growth is calculated is in years. The more years pass and the economy is positively affected within a country, this represents stable economic growth. What supposes the index of quality of life in the country, in theory. It is high…
Knowing that, surely a new question arises. How does this growth occur in the economy of a country? The answer to this is as follows… This growth is increased when production, consumption of services, energy consumption, investment, saving capacity, among many other factors that support a country’s income are stable. Since these factors allow us to observe a considerable increase in the economy. That as mentioned before, these rates reflect an increase in the quality of life of the nation (or at least it is so most of the time).
Economic Growth and its Relationship with GDP (Gross Domestic Product).
It is inevitable not to speak or at least mention the GDP (Gross Domestic Product) of a country. When it comes to defining what economic growth is. Since they are concepts that are closely related. This is due to the simple fact that it is linked to the economic well-being of the people residing in the nation. The use that is given to the data that it produces allows for measures that favor or improve the socioeconomic situation in the nation.
As it is a concept that merely depends on the production and economy of a country. This can be generated both in the short and long term. Since when it comes to production rates, different situations may arise that alter it. Both positively and negatively. In fact, when economic growth is taken in the short term, it is because reference is made to an economic cycle that will be subject to various causes. For example:
- A natural disaster.
- A recession.
- Crop loss.
- Rises in the price of a barrel of oil.
These are just some of the causes that affect economic growth in the short term. But there are many more situations that can affect the economy of a country in the short term. What has been mentioned is focused on economic growth in the short and medium term. However, what happens when long-term economic growth is perceived or estimated?
In general, this type of situation that affects the long term, is carried out through planning and previous studies. That they are oriented to develop ideas or policies that lead to stability. Both for the social aspect and for the economic one.
Know what are the factors that intervene in the economic growth of a country.
Obviously there is a series of factors or elements present in the social and economic aspects of a nation that directly affect economic growth. These factors refer to progress and investment in the development of better-trained citizens or that are related to aspects such as technology. Each of these factors will be described in greater detail below.
The technology
Technology has proven to be a tool that allows improving quality, production and percentages of work. And with the passing of the years, this belief is only reaffirmed, since it is undeniable that thanks to the development of new technologies, not only countries but also the same human being can evolve and improve in multiple aspects.
The technology allows to produce a greater volume of production and provide a better final quality of the products. Allowing production in an industrial way and that can supply the country’s demand. That is why it becomes a determining factor in the economic growth of a nation.
The education.
It is more than clear that academic training is a factor that intervenes directly in the development of any country. That of course includes economic growth. Education makes it possible to form and train citizens with better qualities both for the development of new technologies and for the workforce. Thus being able to generate better results, obtaining higher quality and competitiveness in internal (National) and external (International) markets.
Investment in Capital.
This factor includes everything that is related to the construction or conditioning of the various infrastructures present in the country. As well as the acquisition of tools, machinery, or work equipment that favors the distribution and production of goods and services present in the country.
At this point, what has been the work environment is also taken into consideration. Establishing better conditions for the workers who work in the different companies and institutions that provide the country with goods and services. Since if you have the necessary resources and furniture to carry out the work in the best way, this allows you to maintain a constant production rate.
Characteristics of Economic Growth.
Now to go culminating with this article, we need to mention what are some of the characteristics that are present in economic growth. Below we will indicate them by means of a list.
- Establish a greater investment in the different sectors of production.
- It greatly increases the percentages of productivity in each of the areas of work that a nation has.
- It gives the possibility that citizens can acquire a greater saving capacity.
- Economic growth can be measured and evaluated.
- Because there is increased production, economic growth results in an increase in the number of jobs.
- It positively influences the increase in per capita income.
- Clearly, both the consumption and the sale of the services and goods offered by each company within the country will increase.
- In general, an increase in the economy means a better quality of life for citizens. Therefore, an increase in the population of the country is reflected.
These are some of the most important characteristics that economic growth gives us. However there are many others. Being the vast majority positive and flattering for any country. In this way we close the article in question. We hope that everything explained in this article has been very useful for you. And that the doubts that were had at the beginning of the reading, were clarified for this point.