The primary focus of the word economic attention has been on ways to accelerate the growth rate of national income. Economists and even politicians from all nations, rich or poor, capitalist or socialist, and mixed, have worshiped at the shrine of economic growth. Every nation will like their economy growth performance ranks high or low.
Economic growth has been a dominant force in industrialize nation for many years. It has been the source of industrialization’s greatest triumph: the raising of the ordinary person’s living standard to levels where Luxury goods, foods, shelter, cars, Leisure, and good health care are within reach high rate of economic growth has produced high standard of the world and has led many other nations with varying degrees of success, to strive to copy that performance.
Today, nations have come to accept growth. To these nations there is need to grow economically.
The meaning of economic growth
But what is economic growth?
Economic growth may be defined in terms of the total physical output, or real income, of an economy. Or, to be more sophisticated about it, economic growth refer to increases in real output or real per capital output of an economy.
The definition correctly recognizes that the standard of living of the people in any economy is best measured in term of real output per person. The actual standard of living could decline in an economy if the population increased at a faster rate than the volume of real output. It is therefore, a steady process by which the increased over time to bring about rising levels of national income. Economic growth must be maintained if a nation is to improve the standard of living of the people.
- as the increase in real GNP or NNP which occurs over a period of time or
- As the increase in real GNP or NNP per capital which occurs over time.
Economic growth by either definition us usually calculated in terms of annual percentage rates of growth. For example, if real GNP of Nigeria was N200 billion last year and N210 billion this year, we can calculate the rate of growth by subtracting last year’s real GNP from this year’s real GNP and comparing the difference to last year’s real GNP specifically, the growth rate in this instance is (N210 billion – N200 billion) N200 billion, or 5 percent before we proceed let us look the meaning of economic development.