Economic growth is a concept that affects nearly every aspect of our lives, from job creation and income levels to public services and global competitiveness.
If you're considering a degree in economics, understanding how to measure economic growth is one of the fundamental skills you'll develop. It’s not only essential to academic success but also to launching a career in public policy, finance, consultancy, or international development.
In this post, we’ll explore the most common ways to assess economic performance, compare economic growth with development, and explain how studying economics at Universidad Europea can give you the tools to thrive in this dynamic field.
Defining economic growth
Before exploring how to measure economic growth, it's important to understand what it represents. Economic growth refers to an increase in a country’s production of goods and services over time. This is generally reflected in a rise in Gross Domestic Product (GDP), indicating a healthier and more prosperous economy.
How to measure economic growth: key indicators
There are several metrics used to evaluate economic growth. These indicators help economists, governments, and investors make informed decisions. Here are the most widely used:
Gross Domestic Product (GDP)
GDP is the total monetary value of all finished goods and services produced within a country's borders in a given time period. It’s the most common measure of economic growth.
- Real GDP adjusts for inflation, offering a more accurate reflection of a country's economic performance.
- GDP per capita divides GDP by the population, giving insight into the standard of living.
Gross National Product (GNP)
GNP includes GDP plus income earned by residents from overseas investments, minus income earned by foreigners within the country. It is another important measure when evaluating broader economic activity.
Productivity Levels
Economic growth is also tied to productivity — how efficiently labour and capital are used to produce goods. Higher productivity often leads to growth without requiring additional inputs.
Employment Rates
An expanding economy usually creates jobs. Employment growth, especially in high-value sectors, is often a reliable indicator of economic momentum.
Investment in Infrastructure and Innovation
High levels of investment can signal future growth. Spending on education, transport, and technology often precedes increased economic output.
How do you measure economic development?
While economic growth measures output, economic development is a broader concept. So, how do you measure economic development? It involves improvements in living standards, income equality, education, healthcare, and environmental sustainability.
Key indicators of economic development include:
- Human Development Index (HDI): Combines life expectancy, education, and per capita income.
- Poverty rates: Falling poverty levels suggest more inclusive development.
- Income inequality (Gini coefficient): Lower inequality often means more equitable development.
- Access to education and healthcare: Indicators like literacy rates and infant mortality give insight into social progress.
Economic development, therefore, provides a more holistic view of how economic policies affect people’s lives.
Why study a degree in economics at Universidad Europea?
If you're passionate about solving real-world problems and interested in how economies operate on a global scale, a degree in economics from Universidad Europea offers both academic depth and career flexibility.
Here’s why Universidad Europea stands out:
- Global perspective: With a curriculum grounded in international trends and economic policy, you'll gain insights applicable in both developed and emerging markets.
- Industry connections: Collaborate with multinational companies through internships and projects, helping you apply theory to practice.
- Personalised learning: Small class sizes and close contact with lecturers create a supportive environment for developing your skills.
- Career services: The university provides career coaching, job fairs, and mentoring to help launch your career in economics, finance, consulting, or beyond.
Whether you aim to influence government policy, work in banking, or join an international organisation, Universidad Europea equips you with the analytical and practical tools to succeed.
A launchpad for a broader career in business and technology
While economics is a powerful standalone discipline, it also pairs well with other areas of study. Universidad Europea offers a range of degrees in related fields, including:
- Degree in Business Management and Entrepreneurship: Perfect for future business leaders and startup founders.
- Degree in Business Administration in Madrid or in Malaga: Ideal for those aiming to lead in corporate environments.
- Technology degrees: For those looking to combine economic insight with digital innovation.
These programmes are designed to reflect the demands of today’s job market, giving you a competitive edge in whatever path you choose.
Understanding how to measure economic growth is critical not only to academic success but also to navigating and influencing today’s global economy. Metrics like GDP, productivity, and employment rates offer key insights into a country’s health, while development indicators help us see the bigger picture.