Growth Accounting
Categories: Accounting, Metrics
Growth accounting is when economists try to measure what factors caused economic growth. Literally, “what accounts for this growth in the economy?”
Economists act like archeologists, scavenging through data on labor, productivity, investments into businesses, and technological advancements. The concept that technology could account for some economic growth was first introduced in the late 1950s via the brain of Robert Solow.
It’s really difficult to isolate causes, since most things in the economy are intertwined, i.e. affecting each other. Still, we try.