Economic growth can be defined as an increase in the capability of the economy to produce different services and products at different periods of time. It is similar to economic development. In fact, economic growth is a quantitative indicator of economic development. Economic growth is closely linked with the growth of the general welfare: increase of life expectancy, quality of health care, education, reduction of working hours, etc. A lot of theories on economic growth were developed, and research is being carried out in the framework of these theories. If there is a need to compare economic growth of one country to another country, one should use GNP and GDP, as they take into consideration the population differences of these countries. One way to measure economic growth would be in nominal terms (they comprise inflation). It can also be measured up in real terms, which are usually adjusted to rising prices.

There are several factors, which ensure economic growth, among them are: workforce, capital, investments, quality and quantity of natural resources. When people use various resources and rearrange them to make them more useful and valuable, economic growth takes place. It can also be connected with rapid technological progress. Economic growth can be extensive and intensive. Extensive growth factor is reached through increasing the amount of the resource, for example, by increasing the number of employees. Intensive growth factors are determined to improve and increase the quality management systems and technologies by using innovation, modernization of manufacturing and development of human capital.

Four main types of economic growth are defined in modern theory of growth: steady growth of the leading countries (USA, Europe); the miracles of growth (Taiwan, South Korea, Hong Kong, Singapore); growth disasters (Argentina (one of the richest countries in 1900) and some countries in Central Africa); lack of economic growth (Zimbabwe).

Economic growth has its advantages and disadvantages. High living standards, higher employment, improvement of economic welfare are among the most significant benefits. However, there are also drawbacks of the fast growing economy; they are a high risk of inflation and also harmful effects on the environment, among which are depletion of natural resources, destruction of rain forests and pollution, which can cause lasting consequences for succeeding generations and have a negative impact on people’s lives.