Economic growth

The system of economic growth in developed regions
Historic world GDP per capita
Productivity lowered the cost of most items in terms of work time required to purchase. Real food prices fell due to improvements in transportation and trade, mechanized agriculture, fertilizers, scientific farming and the Green Revolution.
Economic growth rates (percent, vertical) v. standardized tests of student achievement in different regions, both adjusted for GDP per capita in 1960
The marginal costs of a growing economy may gradually exceed the marginal benefits, however measured.
The economic system as a subsystem of the environment: natural resources flow through the economy and end up as waste and pollution

Economy over a certain period of time.

- Economic growth

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Productivity

Efficiency of production of goods or services expressed by some measure.

Labour productivity levels in 2012 in Europe. OECD
Comparison of average labour productivity levels between the OECD member states. Productivity is measured as GDP per hour worked. Blue bars = higher than OECD-average productivity. Yellow bars = lower than average.
Trends in U.S. productivity from labor, capital and multi-factor sources over the 1987-2014 period.
Labour productivity growth in Australia since 1978, measured by GDP per hour worked (indexed)

Labour productivity is a revealing indicator of several economic indicators as it offers a dynamic measure of economic growth, competitiveness, and living standards within an economy.

Economic development

Process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and objectives.

Whereas economic development is a policy intervention aiming to improve the well-being of people, economic growth is a phenomenon of market productivity and increases in GDP; economist Amartya Sen describes economic growth as but "one aspect of the process of economic development".

National accounts

National accounts or national account systems (NAS) are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation.

Della mercatura e del mercante perfetto by Benedetto Cotrugli, cover of 1602 edition; originally written in 1458

Economic data from national accounts are also used for empirical analysis of economic growth and development.

Robert Solow

Solow in 2008
Bill Clinton awarding Solow the National Medal of Science in 1999

Robert Merton Solow, GCIH (born August 23, 1924) is an American economist whose work on the theory of economic growth culminated in the exogenous growth model named after him.

Industrialisation

Period of social and economic change that transforms a human group from an agrarian society into an industrial society.

The effect of industrialisation shown by rising income levels in the 19th century. The graph is showing that the gross national product (at purchasing power parity) per capita between 1750 and 1900 in 1990 US dollars for First World nations (Europe, United States, Canada, Japan) and Third World nations (Europe in east, Southern Asia, Africa, Latin America).
Industrialization also means the mechanization of traditionally manual economic-sectors such as agriculture
Factories, refineries, mines, and agribusiness are all elements of industrialisation
Guangzhou dusk panorama
2006 GDP composition of sector and labour force by occupation. The green, red, and blue components of the colours of the countries represent the percentages for the agriculture, industry, and services sectors respectively.

As industrial workers' incomes rise, markets for consumer goods and services of all kinds tend to expand and provide a further stimulus to industrial investment and economic growth.

Exponential growth

Process that increases quantity over time.

The graph illustrates how exponential growth (green) surpasses both linear (red) and cubic (blue) growth.
Bacteria exhibit exponential growth under optimal conditions.
The J-shaped exponential growth (left, blue) and the S-shaped logistic growth (right, red).

Economic growth is expressed in percentage terms, implying exponential growth.

Industrial Revolution

The transition to new manufacturing processes in Great Britain, continental Europe, and the United States, in the period from about 1760 to sometime between 1820 and 1840.

A Roberts loom in a weaving shed in 1835.
Handloom weaving in 1747, from William Hogarth's Industry and Idleness
European colonial empires at the start of the Industrial Revolution, superimposed upon modern political boundaries.
A weaver in Nürnberg, c. 1524
A model of the spinning jenny in a museum in Wuppertal. Invented by James Hargreaves in 1764, the spinning jenny was one of the innovations that started the revolution.
The only surviving example of a spinning mule built by the inventor Samuel Crompton. The mule produced high-quality thread with minimal labour. Bolton Museum, Greater Manchester
The interior of Marshall's Temple Works in Leeds, West Yorkshire
Lombe's Mill site today, rebuilt as Derby Silk Mill
The reverberatory furnace could produce cast iron using mined coal. The burning coal remained separate from the iron and so did not contaminate the iron with impurities like sulfur and silica. This opened the way to increased iron production.
The Iron Bridge, Shropshire, England, the world's first bridge constructed of iron opened in 1781.
Horizontal (lower) and vertical (upper) cross-sections of a single puddling furnace. A. Fireplace grate; B. Firebricks; C. Cross binders; D. Fireplace; E. Work door; F. Hearth; G. Cast iron retaining plates; H. Bridge wall
A Watt steam engine. James Watt transformed the steam engine from a reciprocating motion that was used for pumping to a rotating motion suited to industrial applications. Watt and others significantly improved the efficiency of the steam engine.
Newcomen's steam-powered atmospheric engine was the first practical piston steam engine. Subsequent steam engines were to power the Industrial Revolution.
Maudslay's famous early screw-cutting lathes of circa 1797 and 1800
The Middletown milling machine of c. 1818, associated with Robert Johnson and Simeon North
The Thames Tunnel (opened 1843).
Cement was used in the world's first underwater tunnel.
The Crystal Palace housed the Great Exhibition of 1851
The Bridgewater Canal, famous because of its commercial success, crossing the Manchester Ship Canal, one of the last canals to be built.
Construction of the first macadam road in the United States (1823). In the foreground, workers are breaking stones "so as not to exceed 6 ounces in weight or to pass a two-inch ring".
Painting depicting the opening of the Liverpool and Manchester Railway in 1830, the first inter-city railway in the world and which spawned Railway Mania due to its success.
Wedgwood tea and coffee service
Winchester High Street, 1853. The number of High Streets (the primary street for retail in Britain) in towns and cities rapidly grew in the 18th century.
The Black Country in England, west of Birmingham
Manchester, England ("Cottonopolis"), pictured in 1840, showing the mass of factory chimneys
A young "drawer" pulling a coal tub along a mine gallery. In Britain, laws passed in 1842 and 1844 improved mine working conditions.
Luddites smashing a power loom in 1812
Levels of air pollution rose during the Industrial Revolution, sparking the first modern environmental laws to be passed in the mid-19th century.
Slater's Mill in Pawtucket, Rhode Island.
Sächsische Maschinenfabrik in Chemnitz, Germany, 1868
Sir Henry Bessemer's Bessemer converter, the most important technique for making steel from the 1850s to the 1950s. Located in Sheffield (Steel City)
Regional GDP per capita changed very little for most of human history before the Industrial Revolution.
Interior of the London Coal Exchange, c. 1808.
European 17th-century colonial expansion, international trade, and creation of financial markets produced a new legal and financial environment, one which supported and enabled 18th-century industrial growth.
As the Industrial Revolution developed British manufactured output surged ahead of other economies.
William Bell Scott Iron and Coal, 1855–60
William and Mary Presenting the Cap of Liberty to Europe, 1716, Sir James Thornhill. Enthroned in heaven with the Virtues behind them are the royals William III and Mary II who had taken the throne after the Glorious Revolution and signed the English Bill of Rights of 1689. William tramples on arbitrary power and hands the red cap of liberty to Europe where, unlike Britain, absolute monarchy stayed the normal form of power execution. Below William is the French king Louis XIV.
A Philosopher Lecturing on the Orrery by Joseph Wright of Derby (c. 1766). Informal philosophical societies spread scientific advances
A primitive lifestyle living outside the Industrial Revolution
A dog forced to eat trash due to pollution, the Industrial Revolution has forced animals into harsh environments most are unable to survive in, leading to starvation and eventual extinction

GDP per capita was broadly stable before the Industrial Revolution and the emergence of the modern capitalist economy, while the Industrial Revolution began an era of per-capita economic growth in capitalist economies.

Gross domestic product

Monetary measure of the market value of all the final goods and services produced in a specific time period by countries.

A map of world economies by size of GDP (nominal) in USD, World Bank, 2014.
Quarterly gross domestic product
An infographic explaining how GDP is calculated in the UK
U.S. GDP computed on the expenditure basis.
Countries by GDP (PPP) per capita (Int$) in 2017 according to the IMF
U.S 2015 GDP computed on the income basis
Shown is how the global material footprint and global CO2 emissions from fossil-fuel combustion and industrial processes changed compared with global GDP.

Quality improvements and inclusion of new products – by not fully adjusting for quality improvements and new products, GDP understates true economic growth. For instance, although computers today are less expensive and more powerful than computers from the past, GDP treats them as the same products by only accounting for the monetary value. The introduction of new products is also difficult to measure accurately and is not reflected in GDP despite the fact that it may increase the standard of living. For example, even the richest person in 1900 could not purchase standard products, such as antibiotics and cell phones, that an average consumer can buy today, since such modern conveniences did not exist then.

Innovation

Practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services.

Thomas Edison with phonograph. Edison was one of the most prolific inventors in history, holding 1,093 U.S. patents in his name.
Original model of three phases of the process of Technological Change

Such "incubators", located close to knowledge clusters (mostly research-based) like universities or other government excellence centres – aim primarily to channel generated knowledge to applied innovation outcomes in order to stimulate regional or national economic growth.

Economics

Social science that studies the production, distribution, and consumption of goods and services.

The supply and demand model describes how prices vary as a result of a balance between product availability and demand. The graph depicts an increase (that is, right-shift) in demand from D1 to D2 along with the consequent increase in price and quantity required to reach a new equilibrium point on the supply curve (S).
A 1638 painting of a French seaport during the heyday of mercantilism
The publication of Adam Smith's The Wealth of Nations in 1776 is considered to be the first formalisation of economic thought.
The Marxist critique of political economy comes from the work of German philosopher Karl Marx.
John Maynard Keynes (right) was a key theorist in economics.
Economists study trade, production and consumption decisions, such as those that occur in a traditional marketplace.
Electronic trading brings together buyers and sellers through an electronic trading platform and network to create virtual market places. Pictured: São Paulo Stock Exchange, Brazil.
An example production–possibility frontier with illustrative points marked.
A map showing the main trade routes for goods within late medieval Europe
Pollution can be a simple example of market failure. If costs of production are not borne by producers but are by the environment, accident victims or others, then prices are distorted.
Environmental scientist sampling water
A basic illustration of economic/business cycles
US unemployment rate, 1990–2021
List of countries by GDP (PPP) per capita in 2014

Macroeconomics analyzes the economy as a system where production, consumption, saving, and investment interact, and factors affecting it: employment of the resources of labour, capital, and land, currency inflation, economic growth, and public policies that have impact on these elements.