what is economic growth 
economic growth is an increase in the production of economic goods and services in one period of time compared with a previous period it can be measured in nominal or real terms traditionally aggregate economic growth is measured in terms of gross national product gnp or gross domestic product gdp although alternative metrics are sometimes used investopedia jiaqi zhouunderstanding economic growthin simplest terms economic growth refers to an increase in aggregate production in an economy which generally manifests as a rise in national income often but not necessarily aggregate gains in production correlate with increased average marginal productivity that leads to an increase in incomes inspiring consumers to open up their wallets and buy more and driving a higher material quality of life and standard of living in economics growth is commonly modeled as a function of physical capital human capital labor force and technology increasing the quantity or quality of the working age population the tools that they have to work with and the recipes that they have available to combine labor capital and raw materials will lead to increased economic output image by sabrina jiang investopedia 2020phases of economic growththe economy moves through different periods of activity this movement is called the business cycle it consists of four phases a single business cycle is dated from peak to peak or trough to trough such cycles generally are not regular in length and there can be a period of contraction during an expansion and vice versa since world war ii the u s economy has experienced more expansions than contractions between 1945 and 2019 the average expansion lasted about 65 months while the average contraction was only 11 months however the great recession from december 2007 to june 2009 lasted for 18 months this was followed by the longest expansion on record 128 months lasting until 2020 with the advent of the covid 19 pandemic 1governments often try to stimulate economic growth by lowering interest rates which makes money cheaper to borrow however that can only last for so long eventually as happened in 2022 and 2023 rates need to be hiked to combat price inflation and keep the economy from boiling over 2