When there is an increase in real GDP, one can find the presence of economic growth. However, we cannot state recovery from a recent recession or a sudden increase in real GDP to be an economic growth.
What we understand from potential GDP is a sustainable economic growth where the hike continues year after year without fail.
Now, 2 important questions in this respect are:
- What are the aspects that regulate this potential GDP?
- What are the factors that help in its growth?