Why are some countries rich and others poor when they have the same number of hours in a day?
Background
Most of the income differences you see across countries today come from differences in long-run growth rates, not from any single recession or boom.
Growth theory tries to explain why those rates differ and whether policy can shift them. The answers are contested, but the stakes are not: sustained growth is the single largest determinant of material welfare over time.
What it covers
Economic growth measures the sustained expansion of an economy's capacity to produce goods and services. The standard metric is real GDP per capita, which strips out both price changes and population growth to approximate improvements in average material living standards.
Growth theory asks why some economies grow faster than others. The Solow model attributes long-run growth to technological progress after capital accumulation hits diminishing returns. Endogenous growth models treat innovation as something the economy produces, not something that falls from the sky. Institutional theories emphasize property rights, governance, and rule of law as preconditions that make accumulation and innovation worth pursuing.
Open question
Is the economy growing because it is accumulating more inputs, using them more efficiently, or both -- and can that pace be sustained?