Economic growth is caused by anything that increases AD, providing there is enough spare capacity available. What also causes it is increases in the efficiency in using factors of production. What can cause this is improvement in education and training, improving labour mobility, increasing competition and obtaining more factors of production.
The benefits of economic growth include:
- Increased output, employment and income.
- Improved standard of living.
- Improved health, education and public services.
- Degrading of the environment by using up resources and creating waste.
- Increased stress and a faster pace of life.
- Increased inequality, difference between rich and poor.