Economic growth and development are two categories that closely interact with each other. Economic growth, for example, is a dramatic upswing.
In the process of the movement of
social production, there are periods during which general economic growth and development occur rather quickly or, conversely, slow down somewhat, and sometimes even decline. With a certain regularity of repetitions in changes in the social production of such fluctuations over a certain period of time, development occurs with a cyclical character. The gap of a certain cycle (known as a single) reflects fluctuations in the state’s economy from one crisis to another.
Economic growth and the cyclical development show constant fluctuations in the market economy, in which production volumes increase and fall. And business activity associated with this indicator of the economy also tends to increase or decrease. Cycling in itself implies periodic ups and downs in the market. At the same time, a period of increased activity characterizes predominantly extensive economic growth and development, and a decrease in business activity is the beginning of intensive development. Thus, the cycle reflects the constant dynamism of a market economy.
The relationship between economic growth and economic development is very clearly illustrated in the "big waves" of Kondratiev. The specified academician has proved that any economy is experiencing certain fluctuations that entail ups and downs. Their length lasts up to 50 years. The theory of
economic cycles does not deny the presence of “small waves," which is understood as considering recessions and growth in business activity, but only in specific sectors. The frequency of such cycles is only five years.
Economic growth and development in close interconnection are explained by the objectivity of cyclical economic fluctuations. Understanding their development will allow them to adapt to economic downturns, which will significantly reduce the negative impact of factors arising from the economic development of the state.
And one such factor that has a significant impact on the sustainability of the economy is population growth. Thus, an increase in the share of the population with the simultaneous presence of the effect of capital retirement due to a decrease in the capital-labor ratio of production can act in only one direction. Due to the decrease in the level of stocks, the amount of capital decreases, and with the growth of the population, capital also has a negative tendency among the increased number of employees.
To maintain stability in the economy, it is necessary to compensate for the negative impact of capital retirement and a sharp population growth with the necessary investment volume. It is such an economic condition with a gradual population growth that contributes to the immutability of both capital and output per worker.