StudentShare solutions
Triangle menu

Importance of economic growth - Essay Example

Nobody downloaded yet
Economic growth of a country is generally measured in terms of percentage change in Gross domestic product. In this context, one thing should be remembered that while measuring economic growth, one needs to take into account change in real GDP. The reason behind considering real GDP instead of nominal GDP is to net out the effect of price rise, i.e. inflation. Nominal GDP is simply a money value of the total amount of goods and services produced in a country in a particular period of time. Hence, it is quite evident that nominal GDP will increase through rise in price level even in the absence of increase in the level of production of goods and services. Therefore, it would be quite unjustified to consider increase in nominal GDP as an indicator of increase in production level of a country. Consequently to obtain reliable measure of economic growth change in real GDP is taken into consideration. Real GDP is calculated by assuming a base year. Selection of a base year for calculation of real GDP is required to be done with adequate care. Conventionally, for calculating real GDP of a country for a particular year, that year is chosen as the base year from the previous years in which economy of that country functioned in a normal way. Once selection of the base year is done, real GDP of a particular year, say current year, is calculated by valuing total amount of goods and services produced in the current year at the base year price level. (Branson, 1989; Chacholiades, 1990; Donbusch, and Fischer, 1989)
Apart from measuring economic growth by estimating change in real GDP, there exists another way to measure economic growth of a country. One can take into account change in the level of per capital income of a country to measure rate of economic growth of that country. Per capita income of a country for particular period is measured by diving GDP by total number of people living in that country in that period of time. If per capita income of a country is found to increase over time, then it can be said that the country has set itself on the path of economic growth. (Donbusch and Fischer, 1989; Clark, 1957,)
Economic growth is regarded as an essential factor for ensuring a country's wellbeing. It is therefore, would be to quite interesting find out why economic growth of a country is regarded as such an important factor for welfare of people living in a country.

Importance of economic growth

Before discussing importance of economic growth, it is necessary to distinguish between economic growth and economic development. Economic growth and economic development, both of these terms are used in the context of indicating wellbeing of a nation. Economic growth, however, is a much narrower concept, compared to economic development. As mentioned earlier, economic growth of a country is measured by taking into account changes in one specific measure only, like real GDP, or per capita income of that country over a particular period of time. Economic development, on the other hand, refers to much more than mere increase in real GDP or per capita income only. Conventionally, the term economic development refers to improvement in a wide range of indicators including GDP growth rate, rate of poverty, literacy rates, rate if life expectancy at birth, infant mortality ...Show more
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Importance of economic growth Essay Example | Topics and Well Written Essays - 3500 words”, n.d.)
Retrieved from https://studentshare.net/sociology/298720-importance-of-economic-growth
(Importance of Economic Growth Essay Example | Topics and Well Written Essays - 3500 Words)
https://studentshare.net/sociology/298720-importance-of-economic-growth.
“Importance of Economic Growth Essay Example | Topics and Well Written Essays - 3500 Words”, n.d. https://studentshare.net/sociology/298720-importance-of-economic-growth.
  • Cited: 0 times

Summary

Economic growth is an essential factor for a country's prosperity. Economic growth of a country can be defined as an increase in the amount of goods and services produced by the economy of the country over time. Economic growth is vital for any country as it is closely associated with standard of living of the people living in a country…
Importance of economic growth
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Importance of economic growth"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Importance of Economic Growth in Achieving Environmental Sustainability
According to the paper, the concept of sustainable development focuses at having an economic growth and development of a nation without harming the current state of the environment. The fundamentals of sustainable environment lie in having an endowed environmental carrying capacity with an eco efficiency of the highest order.
4 pages (1000 words) Coursework
Importance of sustained economic growth,
The economic growth figures and contributions made by different regions to the overall economy of the UK have been presented in Appendix I. The last column of the table presents an overall view of the percentage share of the UK total GVA for each of the NUTS1 regions.
3 pages (750 words) Essay
Economic growth of Asian countries
GDP refers to the value of goods and services produced within the domestic boundary of a country within a given time period. Whenever the GDP rises over time we can say that the concerned country has experienced economic growth. (Branson 1989) In this context, one thing should be remembered that the GDP is a money value of the goods and services.
14 pages (3500 words) Essay
Has economic growth and business success in the Asia Pacific been led by exports, foreign direct investment, and international interaction assess the impact of internationalization in the region &the importance of international production &comodity chain
Before laying down the formal plan of action, it is necessary to understand the elements that will be involved in the strategy that has been developed later in the paper, from the perspective of the AP
8 pages (2000 words) Essay
Economic growth in indonesia
A brief background of the country is provided. Macroeconomic indicators and market development changes are discussed. The paper includes a brief analysis of future economic trends in Indonesia. Implications for the future of economic development in Indonesia are
8 pages (2000 words) Essay
Economic Growth
Percentages encompassed in 1980 sum to less than 100 owing to the explanation that contributors depicted meager values. For instance, population in 1980 encompassed undersized statistics. This expounds
3 pages (750 words) Essay
Write a report that examines the relationship between economic growth and the environment
The issue however depends on the observer; some people will consider economic growth to be the source of all ills affecting the environment. On the other hand, some will argue that economic growth is
5 pages (1250 words) Essay
Economic Growth
Negative growth is when the economy is in recession and depression and vice versa and that is, the reason and features the article covers effectively. I suggest that an increase in economic growth is associated with improvement in the living standards of people.
2 pages (500 words) Essay
Economic Growth in Israel

The report also highlights the economic outlook and forecasts of Israel through the analysis of relevant economic parameters provided by OECD. It was found that though Israel’s economic growth slowed down in 2014, but it again picked up at the end of the year and has been experiencing positive growth since then due to substantial investments.

7 pages (1750 words) Essay
Comments (0)
Click to create a comment
Let us find you another Essay on topic Importance of economic growth for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us