Growth Accounting

DEFINITION of 'Growth Accounting'

A method whereby a set of economic techniques or theories are used to determine what specific factor, or factors, contributed to an economy's growth.

BREAKING DOWN 'Growth Accounting'

Growth accounting allows one to examine the different aspects of growth: production per worker, technology, and savings, to determine which factor most likely created the increase in real GDP.

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RELATED FAQS
  1. Why are the factors of production important to economic growth?

    Find out why the factors of production are critical for real economic growth, where wages rise and consumer goods costs fall ... Read Answer >>
  2. What is the benefit of using real GDP over GDP?

    Find out why real GDP allows economists to measure changes in the economic growth or decline of a country more accurately ... Read Answer >>
  3. Is real GDP a better index of economic performance than GDP?

    Learn why real GDP is a better index for expressing the output of an economy, as it takes into account the factors that distort ... Read Answer >>
  4. What are the main factors that drive share prices in the automotive sector?

    Find out the various factors that drive share prices in the automotive sector; automakers are cyclical stocks so economic ... Read Answer >>
  5. How is the rule of 70 related to the growth rate of a variable?

    Find out more about the rule of 70, what it is used for and how it is related to the growth rate of a variable. Read Answer >>
  6. When do economists use real GDP instead of GDP?

    Learn about the purposes for which economists rely on real GDP. Find out how real GDP is calculated and how it is important ... Read Answer >>
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