√ Definition of Economic Growth, Characteristics, Indicators, Measuring Methods & Factors
Definition of Economic Growth, Characteristics, Indicators, Measuring Methods, Complete Factors - In this discussion, you will learn about economic growth. Which includes the definition, characteristics, indicators, ways of measuring, factors that influence economic growth with a complete and easy-to-understand discussion. For more details, please see the review below carefully.
Definition of Economic Growth, Characteristics, Indicators, Measuring Methods & Factors
Let's first discuss the meaning of economic growth carefully.
Definition of Economic Growth
Economic growth is a process of changing the condition of a country's economy which continuously leads to better conditions during a certain period.
Economic growth can also be interpreted as a process of increasing economic capacity displayed in the form of an increase in national income growth is also an indicator of the success of development economy.
Another definition of economic growth is that economic growth is an increase that occurs in the long term, with the ability of a country to grow providing people with a wide variety of economic goods, this capability grows in accordance with technological advances and institutional and ideological adjustments needed.
Economic growth or economic growth is the amount of increase in aggregate national income or increase in output in a certain period, often within a period of one year.
Definition of Economic Growth According to Experts
After knowing some of the definitions of economic growth in general above, the following is the opinion of experts regarding the definition of economic growth.
1. Budiono (1994)
The definition of economic growth according to Budiono is a process of long-term per capita output growth that occurs if any the tendency (per capita output to increase) which comes from the internal processes of the economy (the forces that are in the economy). Alone.
Not something that comes from outside and is temporary. Or in other languages it is self-generating, which means that the growth process itself generate a force or momentum for the continuation of the growth in the period furthermore.
2. Sadono Sukirno
The definition of economic growth according to is a change in the level of economic activity that applies from year to year. So to find out, a comparison of national income from year to year must be held, which is known as the rate of economic growth.
3. M. P Todaro
The definition of economic growth according to M.P. Todaro is a steady process where production capacity of an economy increases over time to produce increasing levels of national income big.
4. Prof. Simon Kuznets
The definition of economic growth according to Prof. Simon Kuznets is a long-digit increase in a country's ability to provide an increasing number of types of economic goods to its inhabitants, these capabilities grow in accordance with its technological advances and institutional and ideological adjustments needed.
Characteristics of Economic Growth
There are several characteristics of economic growth, including:
- Growth rate of population and product per capita
- Increased productivity
- High rate of structural change
- There is urbanization
- developed country expansion
Economic Growth Indicators
Indicators of economic growth include:
-
Real National Income
Changes that occur to real national income are used by various countries to assess the country's long-term economic growth. A country experiences economic growth if its real national income increases or increases from the previous period -
Per Capita Real Income
A country is said to experience growth if the income of its people increases from time to time. -
Population Welfare
The increase in material welfare that occurs in society continues to increase in the long term. This can be seen from the smooth distribution of goods and services in the country. The smooth distribution of goods and services describes the distribution of income per capita throughout the country. Which means there is an overall increase in welfare in all regions. -
Labor And Unemployment
A country is called a developing country if it has reached the level of maximum employment or full employment if the unemployment rate is less than four percent.
How to Measure Economic Growth
Economic growth in a country can be measured by comparison, for example with national standards. Gross National Product (GNP) for the current year compared to the previous year.
In its implementation, the benchmark for economic growth is Gross National Product (GNP) and Gross Domestic Product (GDP) or Gross Domestic Product.
- GNP has the function of measuring the amount of production output of the national economy owned by citizens, whether they are in the country or abroad.
- GDP has a function as a measuring tool for the amount of production output in the country, both production produced by foreign citizens and the nation itself.
How to calculate the rate of economic growth can be calculated by the formula:
Information:
year t: Year calculated economic growth
GDP t: Growth
GDP t-1: GDP before changing
Factors Affecting Economic Growth
There are factors that influence economic growth, including:
-
Land and Natural Resources
Countries with abundant natural wealth and high economic value will find it easier to develop their economies than countries with less natural wealth. -
Quality of Labor and Population
If the quality of labor and population increases, there will be a boost to the increase in national production and the level of economic activity. -
Capital Goods and Technology Levels
The amount of capital goods will determine the amount of product to be produced, if the more capital goods increase, the higher the production produced in an economy. The more sophisticated the technology used in production, the more efficient production will be. creating new capital goods and producing high-quality goods that have economic value tall. -
Social Systems and Community Attitudes
Economic growth will occur faster if people have a thrifty attitude and save their money for investment. It is known that investment has a positive correlation to economic growth.
Thus has been explained about Definition of Economic Growth, Characteristics, Indicators, Measuring Methods & Factors hopefully can add to your insight and knowledge. Thank you for visiting and don't forget to read other articles.
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