Economic growth is a term used to describe the increase in the total amount of goods and services produced by an economy. It can also be referred to as an increase in GDP, GVA or national income. Generally speaking the more an economy grows, the higher the standard of living for the people in that country. There are many different factors that can contribute to Economic growth such as better use of resources and increased productivity. The most significant factor, however, is the invention of new technology and ideas that make it possible to produce more with the same resources. For example, a computer built today uses much the same inputs as one that was built 10 years ago, but it can do more work.
Increasing the production of goods and services also leads to higher levels of tax revenue for governments which can be used for merit goods such as schools and hospitals or invested in the country infrastructure. Increased consumption and the associated higher levels of tax revenue also help to reduce inflation.
The downsides of economic growth are the risk of materialism where society begins to base their happiness on how many possessions they have and not overall well being, as well as the environmental consequences of higher demand leading to pollution and climate change. In addition the rapid growth of some countries can lead to a lack of social inclusion and rifts within societies.
Growth-supporters counter the concerns of growth-doubters by arguing that as economies grow, societies can move from focusing on basic survival issues to worrying about the environment, helping others and giving back to the community. They also point out that growth creates the wealth and income needed to invest in things such as pollution abatement technologies, improvements in healthcare and bigger “social safety nets” for the poor.