Question

Examine in greater detail the factors that contribute to economic growth. Economic growth is measured by growth in Real GDP. But many factors contribute to that. Among the generally recognized factors that contribute to economic growth are:

•Increases in the amount of physical capital: this can be measured by changes in investment spending (software is included in this category);

•Advances in technology: this can be approximated by research and development spending;

•Increases in human capital: this can be approximated by years of education; however, this is a very unreliable measure as educational quality is highly variable;

•Other factors such as size of labor force also come into play and can be measured rather easily. However, to be meaningful that has to be match between the skills possessed by the labor force and the needs of the economy. Thus, mere size of labor for has to be viewed with the human capital variable in mind.

•Government regulations, tax policy, immigration policy, interest rates all play a role in investment and, thus economic growth.

Discussion gather information on growth in Real GDP and the other variables as possible on a country of your choice.