Factors Affecting Economic Growth

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Factor of Economic Growth Not many theories that discussed the role of various factors in determining the economic growth. Two main strands can distinguished that neoclassical, by the Solow growth model, emphasized the importance of and investment, and more recent theories of endogenous growth developed by Romer and Lucas has drawn attention to human capital and innovation capabilities. Furthermore, a significant contribution to economic growth has been provided by the theory of cumulative causation This Myrdal. In addition, there are other explanations that have emphasized the important role of non-economic factors play in economic performance. These developments have brings to discussion that distinguishes between 'proximate ' and…show more content…
Labor is the third factor that affects economic growth. Skilled labors were organized and develop in a country which allows the economy to grow. Generally, the rule is, is that the size of the workforce associated with population size. It is the rate of decline of population growth, as well as labor force growth. This is where the intervention of foreign workers. New additions to help offset the lack of labor force. Motivation is the desire of workers and other factors that affect the quality of the labor force. The fourth and final factor is economic growth entrepreneurs. Just because a country that has many employees and other growth potential, it does not guarantee economic success. The most important factors are the presence of entrepreneurs who add a touch to the economy by bringing innovation to him. All entrepreneurs need a business climate to allow them to succeed. As the climate including a minimum of government involvement, and economic system, which allow them to save the part of their profits. Industries suffer from the economic growth and the contraction cycles based on many factors. These include the overall health of markets, consumer choice and the world news although not related and events. While several companies performed better than others in their industry, global factors affecting the industry as a whole which should be considered when planning to start or expand a business. Interest…show more content…
Among the advantages of economic growth improved business confidence. The economic growth creates a positive effect on the confidence that people should have when they conduct their business. As a small business firm profitability and gradually increase with economic growth, the increased of confidence in their business and they give more effort to grow large. Next, another advantage economic growth is a leading public service. When the economic growth leads to an increase in government revenue, the government can spend more on public services such as education and the NHS, resulting in quality public services. However, nothing in this world comes for free and just as with economic growth. The human population is continuously engaged in the production of crops which are not -renewable this. With the rapid extraction rate we will not be able to maintain this growth for a very long time. Therefore, we must keep enough to keep this extraction within the prescribed limit such growth may be

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