Economic Growth Dynamics and Policy Impacts
Summary
Economic growth fluctuates across time and space in response to shifts in productivity, factor accumulation and institutional frameworks. Episodes of rapid expansion often arise from improvements in total factor productivity and are sustained only when complemented by robust investment patterns. Conversely, periods of economic shrinking reveal vulnerabilities in political and social institutions, highlighting the importance of governance, accountability and social capabilities in mitigating downturns. Volatility in growth rates further underscores the role of external linkages, human capital and financial development in shaping both the pace and stability of development. Policy interventions—ranging from macroeconomic management and trade liberalisation to targeted structural reforms—can either amplify growth trajectories or buffer against regressions. Understanding these dynamics is critical for designing interventions that promote inclusive, resilient and enduring growth across diverse national contexts.
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Economic Growth Dynamics and Policy Impacts publication trend
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Technical terms
Total factor productivity: The efficiency with which labour and capital inputs are transformed into output.
Capital accumulation: The process by which economies increase their stock of physical assets such as machinery, infrastructure and buildings.
Growth regime: A distinct period characterised by specific average growth rates and volatility patterns in economic output.
Economic shrinking: Episodes of contraction in output per capita marked by one or more structural breaks interrupting growth trends.
Social capabilities: Institutional and societal attributes—such as state autonomy and accountability—that enhance resilience to economic shocks.
References
- Drivers of growth accelerations: What role for capital accumulation?. World Development (2023).
- Resilience to Shrinking as a Catch-Up Strategy: a Comparison of Brazil and Indonesia, 1964–2019. Studies in Comparative International Development (2023).
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