Chapter 20
Economic Growth
By Boundless
![Thumbnail](../../../../../figures.boundless-cdn.com/20886/raw/ppf-expansion.jpg)
Economic growth is measured as the increase in real gross domestic product (GDP) in the long-run, through higher resources or productivity.
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Economies throughout history are defined by an evolution towards common currencies, global trade, and technologies driving productivity.
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Economic growth is typically viewed as positive, but there are mixed repercussions of increased productivity within an economic system.
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Economic growth is the increase in the market value of goods and services produced by an economy over time; the percentage rate of increase in the GDP.
![Thumbnail](../../../../../figures.boundless-cdn.com/20926/square/dp-versus-household-income.jpg)
The economy in the United States is the world's largest single national economy; 2013 GDP estimation was $16.6 trillion.
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On a global scale, economic growth is the sum of the growth of individual countries to give a worldwide total.
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Developing countries can catch up to developed countries by achieving growing faster, which is determined by a wide number of country-specific factors.
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Increasing productivity is a rare win-win, improving the standard of living from a governmental, commercial and consumer perspective.
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Productivity is represented by production functions, and is the amount of output that can be generated from a set of inputs.
![Thumbnail](../../../../../figures.boundless-cdn.com/20705/raw/ssibilities-frontier-curve.jpg)
Technological advances play a crucial role in improving productivity, and thus the standard of living in a system.
![Thumbnail](../../../../../figures.boundless-cdn.com/20591/square/-weltbipworldgroupoecdengl.jpg)
Long-run growth is defined as the sustained rise in the quantity of goods and services that an economy produces.
![Thumbnail](../../../../../figures.boundless-cdn.com/20593/square/ge-2c-and-marginal-product.gif)
The aggregate production function examines how the productivity depends on the quantities of physical capital per worker and human capital per worker.
![Thumbnail](../../../../../figures.boundless-cdn.com/20632/square/tems-department-laboratory.jpeg)
In economics and long-run growth, worker productivity is influenced directly by fixed capital, human capital, physical capital, and technology.
![Thumbnail](../../../../../figures.boundless-cdn.com/20601/raw/ppf-expansion.jpg)
In economics, technological change is a term used to describe the change in a set of feasible production possibilities.
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Government activity and policies have a direct impact on long-run growth. It can invest, and operate through monetary and fiscal policy.
![Thumbnail](../../../../../figures.boundless-cdn.com/20630/square/0px-gdp-accumulated-change.jpg)
Economic growth has the potential to make all people richer, but may have downsides such as increased inequality and environmental impacts.
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The government can incentivize savings and investment by changing the relative cost of taking each action.
A country can impact its long-term growth by affecting human capital through education and healthcare investments.
Property rights are theoretical constructs that determine how a resource is used and owned.
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Government can promote free trade by reducing tariffs, quotas, and non-tariff barriers.
The government can establish intellectual property laws, directly conduct research, or finance research and development.