ABSTRACT
Economic growth is defined as the increase in gross domestic product (GDP). An increase in GDP and particularly in GDP per capita provides the resources for more jobs and income for the poor and more public good provisioning in social sectors by the state. GDP, as a statistical measure of the well-being of nations, was introduced in 1934 by the Russian-American economist Simon Kuznets to the US Congress. Economic growth prevents declining per capita incomes in the case of high population growth and it expands the sum of income available for redistribution to an increasing number of non-earning elderly people. New Growth Theory is concerned with the long run, and attributes growth to the same two factors of production as the standard growth theory: capital and labour. Capital becomes more productive through technological change, while labour becomes more productive through a combination of education and on-the-job training.
