Economic Growth

Economic growth refers to the sustained increase in the output of goods and services in an economy over time, usually measured by gross domestic product and gross domestic product per person. Adam Smith linked growth to the division of labor and market expansion, while Karl Marx analyzed capitalist accumulation as a dynamic but crisis-prone process. Joseph Schumpeter emphasized innovation and creative destruction, Robert Solow’s neoclassical model highlighted capital and technology, and Paul Romer’s endogenous growth theory stressed knowledge and human capital. Walt Rostow’s stages of growth presented growth as a path from traditional society to mass consumption, a modernization view challenged by dependency theorists such as Andre Gunder Frank. Simon Kuznets pioneered national income accounting and proposed an inverted-U relationship between growth and inequality. Douglass North and Daron Acemoglu and James Robinson emphasized institutions as drivers of long-term growth. Critics question whether growth improves wellbeing and sustainability, as in Herman Daly’s steady-state economics, Kate Raworth’s doughnut economics, and degrowth scholars such as Serge Latouche, while Amartya Sen argued for measuring development by capabilities. Economic growth remains central to research on development, inequality, environment, and welfare.