Economic growth is the increase in the market value of goods and services produced within a country over a period of time. It is generally measured by gross domestic product (GDP), which includes consumer spending, business investment, government spending, and net exports. GDP is also often adjusted by population base, allowing comparisons between different regions.
There are many ways to grow an economy, but the key driver of long-term, sustainable economic prosperity is how widely the fruits of that growth are shared by society. In the long run, this requires an expansion of incomes, inspiring consumers to open their wallets and buy more and driving a higher material quality of life for all.
One method of generating economic growth is through increasing the amount of physical capital equipment in the economy, thereby allowing workers to produce more output over a given period. For example, a fisherman with a larger net can catch more fish than a fisherman with a smaller one. Another method is through technological improvements. This type of growth is highly dependent on the rate at which people save and invest their resources. Those savings and investments enable companies to engage in research and development that leads to new innovations, such as gasoline fuel and modern computing. During the early phases of industrialization, greater inequality helped to boost this process by directing resources toward individuals with higher propensities to save and invest.