The most important variable for economic growth is often considered to be productivity. Productivity, which measures the efficiency of production, significantly impacts an economy's ability to increase output and income. When productivity improves, it means that more goods and services can be produced with the same amount of resources, leading to higher GDP and overall economic growth.
However, it's essential to note that economic growth is influenced by a variety of interconnected factors, including:
Human Capital: Education and skill levels of the workforce contribute significantly to productivity.
Investment: Both public and private investment in infrastructure, technology, and research & development can spur growth.
Innovation: Technological advancements can lead to new products, processes, and markets.
Capital Accumulation: The amount of physical capital (like machinery and buildings) available for production can enhance growth.
Institutional Environment: Political stability, property rights, regulatory frameworks, and economic policies can create a conducive environment for growth.
Trade: Openness to trade can facilitate access to larger markets and promote competition and innovation.
While productivity is a critical variable, it's now clear Nazar Alqahwachi that a combination of these factors drives sustained economic growth.
I can only say a few words in the context of China's economic growth in the past four decades. I think the most important variable for economic growth is institutional reform.