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Economic growth
Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP.〔(Statistics on the Growth of the Global Gross Domestic Product (GDP) from 2003 to 2013 ), IMF, October 2012.〕 Of more importance is the growth of the ratio of GDP to population (GDP per capita, which is also called ''per capita income''). An increase in growth caused by more efficient use of inputs (such as physical capital, population, or territory) is referred to as ''intensive growth''. GDP growth caused only by increases in the amount of inputs available for use is called ''extensive growth''.
In economics, "economic growth" or "economic growth theory" typically refers to growth of potential output, i.e., production at "full employment". As an area of study, ''economic growth'' is generally distinguished from ''development economics''. The former is primarily the study of how countries can advance their economies. The latter is the study of the economic development process particularly in low-income countries.
Growth is usually calculated in ''real'' terms – i.e., inflation-adjusted terms – to eliminate the distorting effect of inflation on the price of goods produced. Measurement of economic growth uses national income accounting. Since economic growth is measured as the annual percent change of gross domestic product (GDP), it has all the advantages and drawbacks of that measure.
==Measuring economic growth==
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