<p>The basic idea is simple. If you grow 1% each year for five years you end up with a GDP that is (1.01)^5 of what you started: the 1% growth of each year accumulates over time. </p>

CC BY-SA 3.0
2016-05-19T00:27:50.467Z
2016-05-19T00:27:50.467Z
Fix.B.
<p>In my economics syllabus, one of the student competences is to "Show the cumulative nature of growth and measure average and annual rates of growth". What I don't understand is how a country's GDP growth can be subject to cumulative or compounding effects? </p>

<macroeconomics><gdp><economic-growth>
In what sense is economic growth cumulative?
Harry Wells
# In what sense is economic growth cumulative?

(Asked by: username_0 on 2016-05-18)

In my economics syllabus, one of the student competences is to "Show the cumulative nature of growth and measure average and annual rates of growth". What I don't understand is how a country's GDP growth can be subject to cumulative or compounding effects?

**Tags:** macroeconomics, gdp, economic-growth


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## 1 answers

### Answer by username_1 on 2016-05-19. Score: 1

The basic idea is simple. If you grow 1% each year for five years you end up with a GDP that is (1.01)^5 of what you started: the 1% growth of each year accumulates over time.


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