Economic Growth - Updated Revision Videos

This series of short revision videos covers key aspects of economic growth for Year 12 and Year 13 A Level and IB Economics students.

Economic Growth - Definition and Measurement - A Level and IB Economics

In this short revision video we focus on what economic growth is and how it is measured drawing on UK and international economic data.

Economic Growth – Short Term Factors - A Level and IB Economics

In this short revision video we look at the key factors that can influence short run economic growth in an economy.

Economic Growth – Long Term Factors - A Level and IB Economics

In this revision video we look at some of the key factors that influence the long term growth rate of countries.

Economic Growth in UK Economy – Key Factors

The UK economy is a relatively low-growth country. Our trend growth of real GDP is just 2% per year. What factors have tended to hold back economic growth in the UK economy?

These factors include:

1. Low capital investment as a share of UK GDP
2. Low research and development spending as a share of UK GDP
3. Decades of public under-investment – the legacy is a large infrastructure gap
4. Skills gaps – the UK doesn’t have enough skilled technicians for the jobs available
5. A persistent productivity gap with leading competitor countries
6. A persistent trade deficit (X-M is negative) which acts as a drag on AD
7. Over-dependence on financial services + long-term manufacturing de-industrialisation
8. Slow growth of median real wages and low levels of household savings
9. Inequality is higher than in most advanced, high-income countries
10. High levels of household debt (is the UK economy too dependent on property prices?)

Policies to drive faster, more sustainable and inclusive economic growth need to focus on the causes of growth. Many of them are microeconomic in origin such as slow productivity growth at the level of the firm or long-term deficiencies in vocational training.