Economic Growth


DEFINITION of 'Economic Growth'

An increase in the capacity of an economy to produce goods and services, compared from one period of time to another. Economic growth can be measured in nominal terms, which include inflation, or in real terms, which are adjusted for inflation. For comparing one country's economic growth to another, GDP or GNP per capita should be used as these take into account population differences between countries.


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BREAKING DOWN 'Economic Growth'

Economic growth is usually associated with technological changes. An example is the large growth in the U.S. economy during the introduction of the Internet and the technology that it brought to U.S. industry as a whole. The growth of an economy is thought of not only as an increase in productive capacity but also as an improvement in the quality of life to the people of that economy.

  1. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  2. One-Third Rule

    A rule of thumb that estimates the change in labor productivity ...
  3. Nominal GDP

    A gross domestic product (GDP) figure that has not been adjusted ...
  4. Recession

    A significant decline in activity across the economy, lasting ...
  5. Boom

    A period of time during which sales of a product or business ...
  6. Gross National Product - GNP

    Gross National Product (or GNP) is an economic statistic that ...
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