Definition
It is commonly measured by growth in real GDP, especially on a per-person basis over long periods.
Political Dictionary
Economic Growth
Economic growth is an increase in an economy’s production of goods and services.
Why It Matters
Growth can improve incomes, employment, public revenue, and living standards.
How It Works
Economists compare inflation-adjusted output across periods and analyze productivity, labor, and investment.
History
Modern growth accelerated with industrialization, technology, education, and capital investment.
Example
An economy grows when it produces more output with more workers, capital, or efficiency.
Common Misconceptions
- Any increase in spending equals real growth.
- Growth benefits everyone equally.
- Economic growth and stock-market gains are identical.
Related Terms
- Fiscal Policy
- Monetary Policy
- Inflation
- Economic Growth
- Government Spending
Related Topics
See Also