Thread by @ExpBusinessSA

Economic growth thread
1. There are 2 ways to cause economic growth
1. Increasing government expenditure(this will increase aggregate demand if they spend more on salaries of docs, teachers). Expansive fiscal policy
2. Cutting taxes(This increases aggregate demand) @Wamagaisa

2. Government should play with these two, and not overdoing it to cause excessive budget deficits.
Austerity on the other side, is not applicable to our current situation.

3. Austerity means government deliberately taking measures to reduce government expenditure. This shouldn't be done in our case, it kills the economy further by weakening aggregate demand.

4. Economic growth comes from improvements in the quantity and quality of the factors of production, land, labor, capital and entrepreneurship. Things like machines, factories, roads, technology actually require government to spend.

5. Rate of economic growth is dependent on the rate of savings and investments(We are doing negative in that respect bcoz of inflation)Savings and investments are necessary to engage in research and development
-We need to create superior technology to generate economic growth.

6. Economic growth require
-increase specialisation (workers becoming more skilled and raising productivity)
-Grow labour force, more workers generate more economic goods and services. (In Zim people are loosing jobs and leaving the country)

7. Economic growth can be caused
-discovery of new natural resources (such as diamond) but because of looting and corruption the Marange diamonds failed to cause economic growth. Therefore Zim require improvements in institutions governance&politics to cause economic growth.

8. Institutional factors such as banking system, legal system & good health care system are requisites for economic growth. Zim's banking sector is dysfunctional and the health care system has been destroyed.

9. Incapacitated workers:The only way is to capacited them, once they are capacited their demand will capacite companies producing the goods, in turn those companies will also capacite their employees, thereby increasing more demand which will further capacitate other industries

10. 2020 Economic projections: These are all things that can cause economic growth. Unfortunately the government is projecting 2020 growth without doing anything to any of these factors which causes economic growth. Economic growth calculation eliminates effects of inflation.