Economic growth is the increase in a country’s real gross domestic product (GDP) per capita over a period of time. It is an important metric for measuring national wealth and for comparing living standards between countries. Economic growth is fueled by a combination of factors, including population growth, investment in capital goods, resource extraction, and the productivity of labor and raw materials.
Economic development is an important goal of many nations. It increases a country’s ability to meet the needs of its citizens, and reduces poverty in developing countries. It also allows the nation to become a more attractive partner for foreign investment and trade, and to participate more fully in global governance institutions like the WTO.
The most widely accepted measure of a country’s economy is its GDP. GDP is calculated by adding up the market values of all goods and services produced in the nation. However, it does not take into account all the things that contribute to a country’s well-being. For example, caring for children is not included in GDP if it is done by the parents themselves, but would be if done by a professional child care worker. In addition, GDP does not tell us how evenly the national income is distributed amongst the population.
The underlying cause of economic growth is an increase in the production of goods and services. This is achieved either by increasing the quantity of available labor or by reducing the cost of producing each unit of goods and services. The latter occurs through improved technology or by combining labor and capital more efficiently.