Economic Growth

This chapter analyzes economic growth by examining the aggregate production function. Sources of economic growth are identified and growth rates of different countries are compared.

Determinants of Economic Growth

Key Takeaways

  • The main sources of growth for the United States from 1948 to 2007 were divided between increases in the quantities of labor and of physical capital (about 65%) and in improvements in the qualities of the factors of production and technology (about 35%). Since 2000, however, improvements in factor quality and technology have contributed to about half the economic growth in the United States.
  • There has been a growing disparity in the rates of economic growth in industrialized countries in recent decades, which may reflect various differences in economic structures and policies.