3Economic growth,consumption, incomedistribution, and capitalformation

Introduction

This chapter assesses economic growth and the distribution of income. An increase in income acts as an instrument to attain desired functionings, whose expansion in the long-term may depend on sustained growth in income or GDP.1 And, if growth in GDP is relevant to the expansion of some desired functionings, then it must be associated with an enhanced ability to purchase commodities that are relevant to the attainment of those functionings. That is, GDP growth must be associated with a rise in consumption of goods and services. The study of public and private consumption is therefore relevant, especially so in oil-exporting economies such as Iraq, where a rise ...

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