What causes high economic growth?
High economic growth is mainly associated with certain development economies. Economic history suggests that developed economies usually have lower growth, even in times of economic boom. The double -digit or high single -digit growth rate is often associated with countries in the process of industrialization, those that increase productivity and use their natural and human resources more. High economic growth can be made possible by greater availability of capital, often causing attracting direct foreign investments. Improving the health and education of the country's population can also stimulate rapid economic growth by increasing productivity. Legal reforms have increased the chances of starting private enterprises, while regulatory and tax incentives allowed rural groups and private enterprises to maintain more of their profits. Reforms have enabled many foreign companies to create their own or contractual joint businesses with Chinese companies, while some could trade through completely owned companies inChina. This brought benefits to China in terms of technology transmission, infrastructure development and job creation, while Chinese companies have increased their productivity to international standards. The growth of exports was stimulated by the establishment of special economic zones with special incentives for companies with high technology and those producing goods for export.
High economic growth is therefore stimulated by high capital investments and the introduction of reforms to promote the development of private companies, which are motivated by the ability to maintain most of their profits rather than to be paid to the government. In developing countries with a high level of Rnezamamptation of the Urals, creating jobs in urban areas and movement of workers from landscape to cities can increase employment and productivity levels. Investments in new businesses in urban and rural areas can draw excessive work from farmSector, increasing employment and productivity.
High growth rates historically was achieved by innovation in products, processes, transport and communication. The inventions that stimulated the Industrial Revolution in England led to greater productivity and introduction of railways in the 19th century with the possibilities of rapid transport of raw materials and goods provided for further support for economic growth. In the second part of the 20th century, the world economy was encouraged by a computer revolution and development was at greater speed after the Internet spread. While this type of innovation does not relieve the trading cycle or prevent recession resulting from the failure of the financial system, the longer -term effects of such extensive innovations are to stimulate greater growth in the world economy.