May 25, 2024

1. What is Economic Growth?

 

Economic growth is the increase in the national income or per capita gross domestic product (GDP) of a country, a region or a group of countries over a given period of time, as in the case of the European Union.

A country’s economic growth is usually measured annually. Thus, it is possible to see by comparing how much the country has grown each year or not.

 

While measuring economic growth, gross national product (GNP) or gross domestic product (GDP) data are used. This measurement allows for reasonable comparisons between countries.

However, when measuring economic growth, only limiting GDP does not always lead to an accurate comparison result.

Take the Chinese economy as an example . For example, if we limit this calculation to total income or GDP as a whole, we conclude that China is the richest country in the world. However, this is not the case, since it is also related to the population of China’s population.

2. What are the Factors Affecting Economic Growth?

Among the most important factors affecting economic growth are various factors such as technological progress, investment or accumulation of both physical and human capital.

The most important factor in economic growth is based on the increase in the productivity of goods and services using the same number of resources. This generally requires using the latest technology in production processes and having more qualified workers.

On the other hand, opening to foreign markets is also important for economic growth. In addition, the concept of the so-called institutional framework is of paramount importance. This means that at the core of a country, basic minimums of physical and legal security, peace and freedom must be maintained.

As can be seen, there are various factors affecting economic growth. Economic growth generally depends on technical progress, investment and capital accumulation, both physical and human capital.

3. What is the Link Between Economic Growth and Development?

 

There is an inseparable link between economic growth and economic development. For economic development to occur, economic growth must occur.

Economic growth in a country occurs with technological applications, technical progress, both physical and human capital and capital accumulation in general. This brings about economic development over time.

For example, when a country’s wealth, that is, its GDP, increases, that country will achieve economic growth and this growth will then lead to economic development.

Ultimately, economic growth and development are crucial to the life of the country and its inhabitants. Even if money is not the most important factor in living well, it is an undeniable fact that it still occupies a large place in the lives of all people.

4. What are Economic Growth Models?

When it comes to economic growth models, there are three basic theories. These are considered as classical growth theory, neoclassical growth theory and endogenous growth theory.

Classical Growth Theory

Classical growth theory assumes that a country’s economic growth will decline with increasing population and limited resources. Such an assumption is an implication of the belief of classical growth theory economists, who think that a temporary increase in real GDP per capita will inevitably lead to a population explosion that will constrain a nation’s resources and therefore reduce real GDP. As a result, the country’s economic growth will begin to slow down.

Neoclassical Growth Model

Neoclassical growth theory is an economic growth model that summarizes how a stable rate of economic growth results when three economic forces come into play. These are labor, capital and technology.

The theory assumes that short-run economic equilibrium is the result of varying amounts of labor and capital that play a vital role in the production process. The theory argues that technological change significantly affects the overall functioning of an economy.

In addition, neoclassical growth theory outlines three factors necessary for a growing economy. However, the theory emphasizes the claim that temporary or short-term equilibrium is different from long-run equilibrium and does not require any of the three factors.

Intrinsic Growth Theory

The endogenous growth theory states that economic growth is produced in the economy internally, that is, not through external forces, but through internal forces. theory, technological progress, etc. This contradicts the neoclassical growth model, which claims that external factors such as economic growth are the main sources of economic growth.

5. How Does Economic Growth Happen in the Countries of the World?

Economic growth is taking place in the countries of the world and in the world in general. The first thing to do is to verify this. So much so that countries have done their economic growth studies very emphatically since the Industrial Revolution of the 19th century.

Angus Maddison, an economist who specializes in economic growth, makes it clear with data that economic growth has been phenomenal over the last 200 years.

In addition, according to these data, Western European countries take the lead among the countries with the highest economic growth. Apart from this, some of the former colonial countries such as the United States of America, Canada, Australia and New Zealand are among the countries with economic growth.

Looking at the continents, it is observed that the rate of economic growth varies. For example, Asia is a region that has grown much faster than Africa in the last half century.

6. How to Track Economic Growth Data?

The economic growth data of the countries are calculated and published regularly by the official institutions of the relevant countries. In this context, economic growth data can be accessed from the sources published by the institutions of the relevant countries.

Turkey’s economic growth data is shared by the Strategy and Budget Department under the Presidency. Economic growth data for Turkey can be followed on the growth page of the Strategy and Budget Department.

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