Economic growth is a goal that most people agree should be pursued, but it’s difficult to find effective ways to achieve. It requires big levers that typically are under the purview of governments and global institutions, and there’s a lot of money and effort already being poured into this endeavor.
Economic Growth
There are a few different ways to measure economic growth, but the most common is called gross domestic product (or GDP). This measures final production, including everything from crops to haircuts — the value of which is converted to dollars and then added up for each quarter or year to get a snapshot of the overall amount of “stuff” being produced.
Increasing production can be the result of either more people working or better productivity. The former leads to higher wages and more goods available, while the latter can allow people to enjoy the same material standard of living without working longer hours or putting more stress on their health. The problem is that GDP doesn’t tell us anything about how evenly this wealth is distributed among the population. It also doesn’t capture unpaid labor, such as caring for children (though it is included if it’s done by paid childcare workers).
In general, more economic growth means people are able to consume more. A person who lived in 1820 wouldn’t have had access to a wide range of products that we take for granted today, such as antibiotics, Coca-Cola, or trains for traveling long distances. Growth can also lead to technological progress, allowing for new products and services that can further increase prosperity.