An analysis of the factors affecting the rate of economic growth

Political issues[ edit ] Placard showing negative effects of lack of family planning and having too many children and infants Ethiopia The birth rate is an issue of concern and policy for national governments.

An analysis of the factors affecting the rate of economic growth

Gross domestic product The economic growth rate is calculated from data on GDP estimated by countries' statistical agencies. The rate of growth of GDP per capita is calculated from data on GDP and people for the initial and final periods included in the analysis of the analyst.

Determinants of per capita GDP growth[ edit ] In national income accounting, per capita output can be calculated using the following factors: Productivity improving technologies economic history Economic growth has traditionally been attributed to the accumulation of human and physical capital and the increase in productivity and creation of new goods arising from technological innovation.

Increases in productivity are the major factor responsible for per capita economic growth — this has been especially evident since the midth century. Most of the economic growth in the 20th century was due to increased output per unit of labor, materials, energy, and land less input per widget.

The balance of the growth in output has come from using more inputs. Both of these changes increase output.

An analysis of the factors affecting the rate of economic growth

The increased output included more of the same goods produced previously and new goods and services. During the Second Industrial Revolutiona major factor of productivity growth was the substitution of inanimate power for human and animal labor.

Also there was a great increase in power as steam powered electricity generation and internal combustion supplanted limited wind and water power. Other productivity improvements included mechanized agriculture and scientific agriculture including chemical fertilizers and livestock and poultry management, and the Green Revolution.

Interchangeable parts made with machine tools powered by electric motors evolved into mass productionwhich is universally used today.

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Real food prices fell due to improvements in transportation and trade, mechanized agriculturefertilizersscientific farming and the Green Revolution. Great sources of productivity improvement in the late 19th century were railroads, steam ships, horse-pulled reapers and combine harvestersand steam -powered factories.

By the late 19th century both prices and weekly work hours fell because less labor, materials, and energy were required to produce and transport goods. However, real wages rose, allowing workers to improve their diet, buy consumer goods and afford better housing. New goods and services included television, air conditioning and commercial aviation aftercreating enough new demand to stabilize the work week.

Productivity in the United States grew at an increasing rate throughout the 19th century and was most rapid in the early to middle decades of the 20th century.

Factors that Influence the Economic Development of a Country

Demographic changes[ edit ] Demographic factors may influence growth by changing the employment to population ratio and the labor force participation rate. Women with fewer children and better access to market employment tend to join the labor force in higher percentages.

There is a reduced demand for child labor and children spend more years in school. The increase in the percentage of women in the labor force in the U.

Spending wave Other factors affecting growth[ edit ] Political institutions, property rights, and rule of law[ edit ] See also: These included new laws favorable to the establishment of business, including contract law and laws providing for the protection of private property, and the abolishment of anti-usury laws.

Enforcement of contractual rights is necessary for economic development because it determines the rate and direction of investments.

When the rule of law is absent or weak, the enforcement of property rights depends on threats of violence, which causes bias against new firms because they can not demonstrate reliability to their customers.

Thanks to the underlying homogeneity of its land and people, England was able to achieve a unified legal and fiscal system since the Middle Ages that enabled it to substantially increase the taxes it raised after Many of these intermediate level institutions relied on informal private-order arrangements that combined with public-order institutions associated with states, to lay the foundations of modern rule of law states.

In many urban areas the poor "invade" private or government land to build their houses, so they do not hold title to these properties. Much unregistered property is held in informal form through various property associations and other arrangements. Reasons for extra-legal ownership include excessive bureaucratic red tape in buying property and building.

In some countries it can take over steps and up to 14 years to build on government land. Other causes of extra-legal property are failures to notarize transaction documents or having documents notarized but failing to have them recorded with the official agency.This pamphlet presents the results of an empirical analysis of the factors affecting economic growth in sub-Saharan Africa, using data for the period –97 and a sample of 32 countries.

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International Journal of Academic Research in Business and Social Sciences April , Vol. 2, No. 4 ISSN: regardbouddhiste.com 6 Main Factors Affecting GDP. Article Shared by. ADVERTISEMENTS: the Indian GDP does not reflect this downside of its economic growth.

The explanation of finite (non-renewable) natural resources also tends to be overlooked in GDP. Although India has achieved a satisfactory growth rate in recent years, the planners have failed to.

Remittances are a new financial phenomena and one of the main important sources of incomes based on it seize and economic impact in the world. Zada () studied the factors affecting exchange rate of Pakistan for the period to The study used multiple regression model in which exchange rate was taken as dependent variable while Inflation, interest rate, Foreign exchange reserves, trade balance, money supply and Gross Domestic Product were the independent variables.

Factors Affecting Indian Economic Growth