Economic growth, its types and factors of development

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Over the past century developed many concepts of economic growth, with the main emphasis on the identification of one or another of the parties of the system software and its individual factors.Economic growth is the increase in the production system of the country, resulting in an increase of GDP and net product for the enterprise.In some cases, it can take place without a significant change in production systems, in others - be accompanied by significant improvements in the structure and functions of the entire production system.

economic growth of the first type is characterized by a significant increase in economic resources - the production of new roads, businesses, power plants.This type has a name - the extensive economic growth.The second type of growth called intensive growth, in this case, GDP growth is outstripping the growth increase in the number of available economic resources.In turn, strong economic growth is one of the most important components of a prosperous society, however, the transition to it is extremely difficult.

Methods impact on economic growth are the direct and indirect factors.This line is called the factors that create the opportunity for growth.Direct supply factors:

  • quality and quantity of natural resources;
  • quality and quantity of labor resources;
  • technology and organization of production;
  • volume of fixed capital;
  • development of entrepreneurial skills and their level in the modern society.

Indirect factors include conditions that enable the possible prerequisites for economic growth.Indirect called factors of supply and distribution:

  • tax climate in the economy;
  • reduction in the degree of monopolization of the market;
  • efficiency of credit and banking system;
  • growth in consumer, government and investment spending;
  • possible reallocation of industrial resources in the economy;
  • expansion of exports;
  • current system of income distribution.

At the same time, extensive economic growth is considered the most simple type of growth, it provides quite an easy way to increase the pace of economic development and allows you to quickly achieve an increase in the economic potential of the country.Extensive economic growth is almost always preceded by intensive growth.This is the most important indicators of economic growth are closely intertwined and has a special importance for the full realization of industrial potential.

Today, there are two theories more or less explaining economic growth: New Keynesian and neoclassical.Both theories of economic growth have radically different conceptions about the economic situation in the country.Neoclassical believe the market mechanism, able to solve all the existing problems in the country.Keynesians, in turn, argue that the market mechanism is very slow and can lead the economy to a new level still very long.

Keynesian theory followed by many governments after the war, but as the economic growth to the next level, to detect and negative aspects to stimulate aggregate demand.The proposal could not keep up with the highly inflated demand, steel prices rise and inflation has acquired alarming proportions.Therefore, the eighties were marked by the fact that most countries have turned their attention to the position of neoclassical economists.

Judging by the fact that the problems of economic development and growth in Russia become more and more relevant, it is possible to further prosperity of completely new directions of development of efficient production, achieve higher rates of economic growth, and as a consequence, increased material well-being of Russian citizens.