Measuring Economic Growth

Economics: IB Diploma, topic 2.4.1

Economic growth is a key indicator of an economy's overall health and progression.

Economic growth ultimately determines the prevailing standard of living in a country. Economists measure growth by the percentage change in real (inflation-adjusted) gross domestic product. An annual growth rate of more than 3% is considered good.
Economic growth can be measured as the growth rate in real GDP per capita (per person) over time.

Every country worries about economic growth. In the United States and other high-income countries, the question is whether economic growth continues to provide the same remarkable gains in our standard of living as it did during the twentieth century.
Meanwhile, can middle-income countries like Brazil, Egypt, or Poland catch up to the higher-income countries, or must they remain in the second tier of per capita income?

Of the world’s population of roughly 7.5 billion people, about 1.1 billion are scraping by on incomes that average less than $2 per day, not that different from the standard of living 2,000 years ago.
Can the world’s poor be lifted from their fearful poverty? As the 1995 Nobel laureate in economics, Robert E. Lucas Jr., once noted: “The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else.”

Test yourself on Measuring Economic Growth

What level of annual economic growth is generally considered "good" by economists?
How is economic growth measured?