The concept of economic growth the measurement

Economic growth - the increase of potential and real GNP growing economic strength of the country.

It is measured in two interrelated ways: an increase in real GNP or NNP (gross and net national product) for a certain period of time or an increase in the national product per capita, an increase in living standards.

The essence of economic growth is to allow and playing at a new level the basic contradiction of the economy: between the immensity of the needs and limited resources.

What goals are to economic growth?

1. Raising living standards.

2. Maintenance of national security.

A growing economy is characterized by the annual growth of real product that can be used to better meet the needs of existing or to develop new programs.

Economic growth is measured by the following indicators:

1. National income (NI) growth per capita,

2. Improving the quality and increasing diversity of manufactured goods and services,

3. Improve the distribution of NI in the population, ie growth in real income per capita,

4. Increase in free time

5. Reducing inflation,

6. Employment growth,

7. Increase in quality of life (social protection of unemployed, the disabled)

8. Increased investment in human capital.

Economic growth is measured by annual growth rate, which is calculated as follows:

Average. year. % = GDP growth this year, GDP growth last year
GDP growth last year

where: Yt - GDP for the period t;

Yt-1 - GDP in the previous period.

The optimum ratio is 2 - 3%.