The continued growth or economic growth reflects increased income, securities or assets of both a country and a region over a specific period.
Continued growth will also be understood as a favorable trade balance, which will lead as a direct consequence to the inhabitants of that country having a better quality of life.
To measure this type of growth, the percentage increase in real gross domestic product (GDP) associated with productivity will be taken into account.
According to experts, such productivity will depend on GDP per capital; that is, the income per inhabitants of the region or country.
Main features
Continuous growth is a term that begins to appear around 1800; Until that date, GDP per person was very low and therefore it was not considered an aspect to study.
When we began to analyze continuous growth, we started from two categories: the first, when the increase was due to the increase in income; and the second, when it was generated by increases in productivity.
The theoretical models that began to explain economic growth were the neoclassical models of traditional growth or Solow growth, and the Washington consensus.
Traditional growth or Solow growth emerged to be able to explain what happened to continuous growth based on analysis.
Then it was possible to differentiate the per capita income using exogenous parameters when different factors were in play.
According to the Solow model, all per capita growth arises from the technological process. It is also stated that growth is exogenous, starting from a principle with a specific value.
The flaw in this method was that it was not possible to define exactly how or why economies grow.
For its part, the Washington consensus came from the publication that appears in the 1990s signed by John Williamson.
There it was established that the growth of the countries was linked to macroeconomic stability, the distribution of resources through the market and the international opening of markets.
With this method it was determined that growth was linked to trade, which worked from incentives such as the reduction of import duties, competitive exchange rates and the promotion of so-called free zones.
Controversial aspects of continued growth
Continuous growth affects many aspects of the correct development of a country, such as the economy, politics and the social sphere.
Almost all current systems associate growth with factors such as well-being and progress, but the detractors of capitalism differ since they consider that economic growth in many cases does not generate social cohesion.
The second controversial aspect of continuous growth lies in the impossibility of being able to maintain stability without harming the environment, since many activities necessary for economic growth use non-renewable energy resources.
References
- Ochoa, G. (2009). Financial administration. Retrieved on December 13, 2017 from: usbscz.edu.bo
- Continuous growth. Retrieved on December 13, 2017 from: es.wikipedia.org
- Taylor, A. (1994). Three phases of economic growth. Retrieved on December 5, 2017 from: books.google.es
- Drury, C. (2013). Managment and cost accounting. Hong Kong: ELBS. Retrieved on December 5, 2017 from: books.google.es
- Weil, R. (2012). Financial Accounting: An Introduction to Concepts, Methods, and Uses. Retrieved on December 5, 2017 from: usbscz.edu.bo