Analyze Venezuela Recent Growth Experience from the Standpoint of the Growth Models.
Economic growth is primarily defined as the increase in the value of inflation-adjusted services and goods that are produced by a particular economy over a period of time. Conventionally, it is measured as a percentage of the increase in the real GDP. Among other important factors that are put under consideration is the growth ratio of the gross domestic product to population also referred to as gross domestic product per capita. Growth increase caused by the efficient use of population, territory, or physical capital is called intensive growth. The growth of the economy is computed from the data collected by a particular country on population and gross domestic product. Small values of growth rates over a broad time frame tend to have an enormous impact on the economic growth of a nation (Barro p.13). This is due to the mathematical factor of exponential growth. This situation results in a vast improvement of the living standards of the inhabitants of said nation if this growth happens over a period of many years.
Physical capital refers to the buildings, computers, equipment and machinery that assist the production process of turning raw materials into the finished products. Economists refer to physical capital as a factor of production since it is part and parcel of the production process (Weil p.16). Since physical capital is a primary element i…
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