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Economic growth is the process by which an economy increases its ability to produce goods and services as measured by output. Immediate causes of economic growth are: (1) an increase in the quantity of capital goods; (2) the introduction of new techniques of production and new kinds of machines. Long-term causes of growth are research and invention, population growth and improved education. Population growth may increase total output, but the other causes also increase productivity (labour-hour output) and provide the potential for increases in per capita growth, hence economic well-being. Numerous theories of economic growth include those by Adam Smith, Karl Marx, Joseph Schupeter, Roy Harrod, E.D. Domar and Franco Modigliani TF.
See also economic development.Further reading Karl Marx, The Marx-Engels Reader (1848); , Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776). |
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