Economic Growth
Economic growth denotes a rise in a country's standard of living over time. It is essentially an improvement in an economy's marginal production from what it might achieve previously. Growth economists investigate how the living conditions of different nations and over time differ in order to determine the degree of economic growth. It is calculated by the difference in Gross Domestic Product as well as the change in Gross National Product (Haapanen and Petri 3493).
Factors Contributing to Economic Growth
The aim of this paper is to address the reasons that lead to economic growth and what a society should do to improve economic growth. Among the factors that contribute to economic growth is the natural resource endowment. A nation that has sufficient natural resources that are employed in a good way will be able to grow economically (Haapanen and Petri 3500). A fair distribution of the available resources all over the society as well as making good use for them is what will enhance economic growth in our society.
There is also the factor of physical capital. When there is an increased investment in the physical capital like roads, machinery, and factories, the cost of economic activities will reduce, thus enhancing economic growth. The society should, therefore, advocate for a high rate of investment in physical capital to increase the level of output.
Human capital is also among the factors that contribute to economic growth. Investing in the education and health of workers enables them to produce more output that will enhance economic growth. The human capital can also earn economic returns for the owner (McCombie, and Anthony 264). There is, therefore, need to ensure that the individuals living in society are educated and healthy to enhance their productivity.
Population growth also leads to economic growth since it will mean the availability of more workforces. Finally, technology enhances the production of quality products and services within a very short time. Because of this, the society needs to embrace technological innovation.
Works Cited
Haapanen, Liisa, and Petri Tapio. “Economic growth as phenomenon, institution and ideology: a qualitative content analysis of the 21st century growth critique.” Journal of Cleaner Production 112 (2016): 3492-3503.
McCombie, John, and Anthony Philip Thirlwall. Economic growth and the balance-of-payments constraint. Springer, 2016.
