Economic growth per capita looks at the average increase in real GDP per person. We could have economic growth of 3% a year. But, if population growth is also 3%, then average incomes – Real GDP per capita will remain the same. If the population declines by 2% a year, but real GDP increases 1% …
The trend rate of economic growth is the average sustainable rate of economic growth over a period of time. It is determined by growth in productivity.
Economic growth means an increase in real GDP – an increase real incomes. This is usually considered beneficial, but there are also potential costs of economic growth such as: Inflation Boom and bust economic cycles Current account deficit Environmental costs – pollution, loss of non-renewable resources Congestion Potential of widening inequality. The costs of economic …
Readers Question: Does the level of real income grow as the economy grows? Can we say that real income grows as the economy grows? If yes, what factors surround it? Summary In a period of positive economic growth, usually, you would expect a rise in real wages and higher pay. However, it is not guaranteed. …
Readers Question: Why is it that when there is low economic growth, unemployment rises? A low rate of economic growth can cause higher unemployment. Though it is not always the case. During 2010-13 the UK experienced a slow rate of economic growth, but unexpectedly unemployment fell. If there is negative economic growth (recession) we would …
Economic growth means an increase in national income, but does economic growth actually help to reduce relative poverty and income inequality – or can economic growth exacerbate existing income inequalities? There are two types of poverty: Relative poverty: This is when income is a certain percentage less than the average income. For example, in the …
Increasing the rates of economic growth has long been the holy grail of conventional economics and politics. To a large extent, most developed economies have been highly successful in increasing economic output. But, has such an impressive increase in national output actually improved people’s standard of living? To decide whether economic growth has increased happiness …
In recent years, the UK has seen a more flexible labour market. One phenomena is the growth in self-employed contractors. This category of workers have different rights to employees. Self-employment can be attractive to workers seeking greater flexibility. But, there is also concern firms are using the categorisation of self-employment as a bogus method to …