Growth Accounting Equations of Different Countries | Business Economics

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BUSINESS ECONOMICS

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Contents
Introduction................................................................................................................................3
Growth accounting and drivers of growth for USA...................................................................3
Growth accounting and drivers of growth for UK.....................................................................6
Conclusion..................................................................................................................................8
Reference....................................................................................................................................9

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Introduction
Real GDP growth rate is the growth rate of an economy after the adjustment is done for the
inflation. That means in case of read GDP growth rate, there is a relative change in the
production of a country compared to the other price level and the resources used in the
process of production. As per the prediction the real growth rate of the US and the global
economy as a whole will increase in the coming years. The objective of the paper is to
discuss the drivers of growth rate so that growth accounting can be discussed for the USA
and UK, one of the biggest economic rivals of the USA.
Growth accounting and drivers of growth for USA
In general the growth rate of the economy of the USA depends on the changes in the
aggregate demand in the economy (Asongu and Odhiambo, 2018). The aggregate demand in
turn has some of the components that change the value of the aggregate demand in the
economy in any point of time. These drivers are the consumption expenditures, investment
expenditures, government expenditures and the net export.
Figure 1: The real GDP growth rate of the USA over the years
(Source: Conference-board.org, 2020)