The Economic Growth Of A Country Samples †MyAssignmenthelp.com

Question: Discuss about theEconomic Growth Of A Country. Answer: Introduction The economy of a country and usually represent the financial, fiscal and monetary aspects of a country. The economic growth of a country, in general, is expected to increase the overall welfare of the country as well as of the residents of the country. Usually the economic growth of a country is measured in terms of GDP per capita of the country. There are several probable factors, which contribute to the economic growth of a country. Investment and Economic Growth One of the factors of the National Income of a country is the investment expenditures in the country. The empirical evidences, across the world usually show that there exist a positive correlation between the economic growth of a country and the investment expenditure in the concerned countries. The relation is found to be bi-directional in most of the cases. Figure 1: Investment and Real GDP Growth relationship in OECD and BRIC Countries (Source: Alfaro Johnson, 2012) Population Growth and Economic Growth Another factor, apart from investment, which is expected to have impacts on the economic growth of the same is the growth of population in the country. This can be seen with the help of the following date evidences: Figure 2: Relationship between population growth and economic growth (Source: Coale Hoover, 2015) Causal Relationships Increase in the investment of a country leads to increase in the productive activities of the country itself which in turn is positively reflected in the economic growth of the country. Conversely, higher economic growth also leads to increase in the investment capabilities of the country. Increase in the population growth leads to increase in the human factors of production (labor and human capital) which in turn contributes positively to the economic growth of the same. References Alfaro, L., Johnson, M. S. (2012). Foreign direct investment and growth. InThe evidence and impact of financial globalization(pp. 299-309). Coale, A. J., Hoover, E. M. (2015).Population growth and economic development. Princeton University Press.