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Economic Growth : An increase in real national output of a country over a…
Economic Growth
: An increase in real national output of a country over a period of time
Sustainable Economic Growth
: Rate of growth that can be maintained in the long term without creating significant economic problems
Inclusive Economic Growth
: Economic growth that creates opportunities for all segments of population and distributes dividends of increased prosperity fairly across society.
Indicator 2 : Inclusion
Poverty rate
Income Gini
Median household income
Wealth Gini
Indicator 3 : Intergenerational equity and sustainability
Adjusted net savings
Public indebtedness as a share of GDP
Proportion ratio of retirees and youth to working age population
Carbon intensity of economic output
Indicator 1 : Growth & Development
Labour productivity
Employment
GDP per capita
Life expectancy
Benefits of Economic Growth
Helps avoid other macroeconomic problems
Enables easier redistribution of incomes
Increased levels of consumption leading to higher SOL
Society can afford to care more for environment
Costs of Economic Growth
Balance of Payment deficit
Current opportunity cost of growth
Negative social effects
Environmental costs and depletion of non-renewable resources
Increase in unemployment
Increased in income inequality
Problems of recession
Strain on government budget
Deflationary spiral
Negative/Pessimistic outlook
Loss of output and welfare
Increased unemployment
Economic Development
Economic indicators
Change in real GDP per capita
Poverty & Income distribution
Labour & Employment
Inflation
Military Expenditure
Non-economic indicators
Measure of Economic Welfare
Physical Quantity of Life index
Human Development Index
Causes of Economic Growth
Supply Side Factors
Increase in quality of factors of production
Increase in level of technology
Increase in quantity of factors of production
Demand Side Factors
Investment to increase productive capacity of economy in the long run
Structural Factors
Law enforcement and stable political climates
Social structure for fluid upwards & downwards mobility based on meritocracy
External Factors
Opens up markets and enables exporting firms to enjoy economies of scale
Policies to encourage desirable economic growth
Fiscal Policy : Increase in government expenditure or reduction in taxes
To encourage investment
Tax concessions to encourage private domestic and foreign investments
Government expenditure to build infrastructure such as roads and airports / investment on human capital such as schools and training facilities
To encourage technological improvements
Tax incentives to encourage R & D.
Government expenditure to provide educational facilities to increase accessibility to education so as to provide the necessary supply of scientists, engineers.
Monetary Policy
: Promote growth via influencing interest rates / money supply to encourage investment
Aggregate Supply Side Policy
:
Development of human capital via upgrading and retraining of workers, the development infrastructure and R & D