Growth accounting

Growth accounting is a method used to explain how much of a country's economic growth can be attributed to various factors, such as increases in labor, capital (like machines and buildings), and technological progress. By breaking down growth into these components, economists can determine whether improvements are due to more workers and tools, or if innovations are driving productivity. This analysis helps policymakers understand the sources of growth and where to focus efforts, such as education or infrastructure development, to foster further economic improvement.