Download This PaperMeasuring Economic Growth and Its Relation with Production Possibility Frontier and Returns to Scale
International Journal of Economics and Research, Vol. 7, No. 6, p. 75-86, 2016
International Journal of Economics and Research, Vol. 8, No. 2, p. 16, 2017
13 Pages Posted: 2 Jun 2017
Date Written: December 28, 2016
Abstract
Economic growth is frequently explained by an increase in the quantity of production. However, economic growth is an increase in the productive capacity of an economy and it is explained by an outward shift of production possibility frontier. The aim of this study is to measure economic growth as an increase in the productive capacity by using production possibility frontier. Our result shows that there is a condition in order to guarantee positive economic growth.
Keywords: Economic Growth, Production Possibility Frontier, Returns to Scale
JEL Classification: O40, O49
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