For many years, the term “endogenous economic growth” was used to describe the difference between what the government did in the form of public works projects and the growth that resulted from those projects. For example, the federal highway system was designed to generate economic growth along the way, but as a result it also created jobs, which in turn generated economic growth. It may be said that for the long run, it was a net gain for all involved.
Today, the term “endogenous economic growth” is widely used. It describes any economic growth that is the result of an existing or potential government action. Examples include tax cuts, job creation, infrastructure development, or transfer of existing resources to private hands. While each of these actions can have a positive or negative effect, they all have the potential to create some type of economic growth. This can help to explain why cutting taxes can have a stimulative effect on the economy.
But, how are growth rates defined? The growth rates of the economy are not only dependent on political factors, but they are also affected by various economic factors such as interest rates, unemployment rates, inflation, technology, globalization, and reinvestment. As you can see, there are many different variables that go into determining economic growth rates, making it difficult to put a label on any particular rate. Still, there are ways to measure the rate of economic growth across countries. One of the most common ways is GDP per capita growth rates.
One commonly used measure of economic growth is gross domestic product per capita growth. By looking at how much economic output is produced for every dollar of investment, economists try to get a sense of whether or not the country is growing. In doing so, they take into consideration the size of the economy, the level of inflation, and other factors. Because GDP is usually released monthly, it's important to look at several different months to get a complete picture of how the economy is performing. To get the best estimate, a study conducted every 6 months should be taken.
Another widely used measure of economic growth is the gross domestic product per capita index, or GDI. With this index, economies compare their performance to the group average. It's considered to be a good measure of economic growth because it provides a sense of downward variance between economies.
Other indicators of economic growth are market indices, including gross domestic product and interest rates. These provide clues as to how a country's economy is doing. Consumer spending and business activity are also key indicators. These allow researchers to determine what is working in the markets and what isn't. These rates tend to fluctuate, . . . . . . so they're not used to make broad general statements about economic growth.