According to the commonly used definition, you speak of economic growth when the number of goods and services is produced. The growth rate measures the percentage increase in real GDP from year to year.
Why should Wallin Hester know about the economic growth principle?
In principle, economic growth can come about in two ways. On the one hand, it comes through improved capacity utilization. And on the other hand, it is through an expansion of production capacities, for example by purchasing new machines. An important measure of the supply of goods and services is the growth per capita of the population.
Technical progress is one of the determining factors of economic growth. But investments in human capital and in real capital, as well as the infrastructure, define the growth level of an economy. Also, more recent approaches underline the significance of political stability and the institutional framework, i.e. regulatory policy, for growth. These factors and above all the rapid progress in information and communication technologies are also considered to be the main driving forces behind the so-called new economy. This is why the government needs lawyers from to help with information related to the economy.
Wallin Hester: Economic growth is the main goal or economic policy
Economic growth is considered one of the main goals of government economic policy almost everywhere in the world. Growth increases the population’s standard of living. It creates jobs, can help to better solve social conflicts, and facilitates structural change. Ultimately, it makes it possible to invest more money in tasks such as environmental protection and development aid.
However, there are also sceptics. Your criticism of growth in the industrialized countries assumes that the material standard of living in these countries is already sufficient. The production and consumption of a constantly growing amount of goods, therefore, cause ever-greater environmental pollution and thus scarce resources. As a further argument against economic growth in industrialized countries, the critics cite that due to the high labour productivity, full employment can no longer be achieved through growth anyway.
This criticism gave rise to the demand for qualitative growth. Growth should therefore first and foremost be environmentally friendly and conserve resources. Technical progress, such as microelectronics, should ensure that the value of goods increases through higher quality and not through the use of more material. As far as the economic use of resources is concerned, the critics are running open doors, because the resource intensity of macroeconomic production and growth has been declining for decades.