- An increase in real GDP occurring over some time period, or
- An increase in real GDP per capita occurring over some time period.
Economic growth is calculated as percentage rate of growth per quarter (3-month period) or per year.
Real GDP in US
2006: $ 12976.2 Billion
2007 $ 13254.1 Billion
US economic growth rate for 2007:
Ok. So that’s just a fact. Sometimes we have a higher growth, sometimes lower. Some countries have higher growth than other country at a particular time. So why do we need a model?
Thinking with models, even simple models, can help us reach deeper understandings that enable us to better explain data, forecast the future with greater reliability, and to see the potential ramifications of decisions, whether those be individual choices or national policies.
Our models, some simple models of economic growth will provide all three of those benefits. The models will explain growth (at least partly) show why growth may differ across countries and change over time, and point towards particular policy actions.