Economic growth is a major goal for most governments and multilateral organizations. It’s also a crowded field for people hoping to make a difference.
There are a few different ways to measure economic growth. The most basic way is by increasing the value of a country’s GDP (gross domestic product). Economists will often adjust this number for inflation to make sure they are truly seeing an increase in the value of goods and services.
Another way to look at economic growth is by increasing labor productivity. This is done by providing laborers with more tools to work with, such as newer and better equipment or technology. For example, a fisherman with a net will be able to catch more fish per period than one who is using a rod. This type of economic growth is known as extensive economic growth.
Other types of economic growth include finding and developing new resources, and enhancing the quality or efficiency of existing ones. For example, growing crops more efficiently or finding and exploiting oil reserves will lead to an economy expanding. This is known as intensive economic growth.
While economic growth can have many positive effects, there are some important downsides to keep in mind. Most prominently, economic growth is a major cause of climate change. It requires energy to power it, and a large portion of that comes from polluting fossil fuels. This can lead to severe environmental problems that will affect future generations.