The recent controversy over President Obama's economic stimulus package demonstrates the significance of economic growth in economic policy, since those in favor of the package argue it will spur economic growth in contrast to opponents who maintain exactly the opposite. Economic growth is defined as "the amount of goods and services produced by an economy over time" (Economic, 2009, p. 1). As such, many see the stimulus plan with its creation of jobs as a spur to economic growth. Refurbishing America's rundown infrastructure (roads, bridges, etc.) will permit greater transport of goods and services. The stimulus plan is argued as a source of new job creation. Economic growth theory equates to growth of potential output, or what one economist calls "production at full employment" when growth in demand increases (Economic, 2009, p. 1). Measuring the degree of economic growth takes place by measuring the change in gross domestic product (GDP), after adjustment for inflation (Economic, 2009). Fluctuations in economic growth often occur due to numerous factors that impact GDP, from oil shocks and recession to natural disasters and other factors. Economic growth is often associated with the concept of an increasing "stock of capital," and it is government policy to encourage economic growth while keeping prices in check (Economic, 2009). Economic growth can be a somewhat vague term that is often the subject of debate where economic policy is concerned.
Economic growth. (2009). Wikipedia. Retrieved 11 February 2009 at: http://en.wikipedia.org/wiki/Economic_growth, 1-12.
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