Economic growth is the overall growth in an economy. Gross National Product and Gross Domestic Product are the normal measures of economic growth. Because growth can come in many ways, GNP and GDP are not particularly good measures. More so, economic growth can occur from having more people in an economy. If economic growth occurs more slowly than the population growth, then there can be economic growth, but the average person is less well-off. As economic growth is measured as the annual percent change of National Income it has all the advantages and drawbacks of that level variable.
There are two types of economic growth, ACTUAL and POTENTIAL. We have to recognise the difference between actual and potential economic growth.
Actual Growth: this is the percentage annual increase in national output and is also known as the ‘GDP’ (Gross Domestic Output). This is said to be the rate of growth in actual output produced. Statistics of GDP growth rates refer to actual growth when they are published.
This is a table of the GDP Growth rates for the last 10 years. I have included a few countries including the UK:
Year U.K. Italy Netherlands Belgium Switzerland Sweden Australia New Zealand
2005 - 0.16 0.94 1.16 - 2.47 2.46 -
2004 3.08 1.22 1.72 2.59 2.07 3.74 3.55 3.48
2003 &nb ...