Economic growth is a measure of how much more goods and services are produced during a period than in the past. It is typically reported as a percentage.
It is widely agreed that accelerating global economic growth is vital for the wellbeing of humanity. This is because rising incomes provide the ability to purchase more products and services that improve one’s material quality of life. They also enable governments to invest in public goods and infrastructure, and they generate tax revenue that can be spent on merit goods like education and healthcare.
A booming economy can be driven by many different factors. One of the most important is technological progress. New technologies allow people to produce more output with the same input. For example, a fisherman with a net will be able to catch more fish in an hour than a fisherman with a stick.
Other drivers of growth include improving labor efficiency through education and training and improvements in managerial skills. Increasing productivity makes it possible for businesses to grow faster, which in turn leads to higher economic output.
The benefits of economic growth are considerable, but there are risks associated with rapid growth as well. For example, a brisk economy can lead to environmental damage and over-exploitation of natural resources. It can also create inequality between urban and rural areas, or give rise to inflation. Nevertheless, it is essential to continue working toward economic growth that is inclusive and sustainable.