Meaning of Economic Growth
What is Economic Growth:
Economic growth is the increase in income or the value of goods and services that are generated in the economy of a country or region in a given time, which is measured in years.
Economic growth is observed when the indicators of production, energy consumption, saving capacity, investment, consumption of services, among others, increase, which together make up the income of a country and, in theory, reflect an increase in quality. life of the population.
Economic growth is important because it is directly related to the country's GDP (Gross Domestic Product). That is, since it is a factor related to the economic well-being of citizens, the data it produces is used in order to determine the measures for the socioeconomic improvements of a country.
However, economic growth can be generated in the short or long term. When it is estimated in the short term, it is referring to an economic cycle that is affected by various causes such as a recession, rises in the price of oil, loss of crops, among others.
However, when talking about long-term economic growth, reference is made to deeper analysis and studies about the economy in order to develop plans and policies that lead to stability and stable growth in terms of economic and social matters.
Factors involved in economic growth
There are several factors that affect and directly affect the economic growth of a nation, among them we can mention:
Investment in capital: this investment has to do with everything related to the conditioning of infrastructures, tools, equipment and the improvement of working conditions where the production and distribution of goods and services is carried out.
Education: having people trained in academics and technology, plus a qualified workforce in the various work areas, will generate a final result of better quality and competitiveness in the national and international market.
Technology: it is a tool that has made it possible to improve production channels, quality and percentage of work. That is, it is produced in greater volume and with better final quality.
Characteristics of economic growth
Below are the main characteristics reflected by economic growth in a country.
- The percentage of total productivity in the various work areas of a country increases.
- Economic growth is observable and measurable.
- Positively affects income growth per capita.
- It is reflected in the increase in the number of population of a country. Greater amount of people.
- Consumption and sale of goods and services increases.
- The number of jobs is increasing.
- People have a greater capacity to save.
- Greater investment in various productive sectors.