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GEOMETRIC GROWTH

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Definition:
Geometric growth refers to the situation where successive changes in a population differ by a constant ratio (as distinct from a constant amount for arithmetic change).

Context:
Geometric growth rates may take the form of annual growth rates, quarter-on-previous quarter growth rates or month-on-previous month growth rates.

The geometric growth rate is applicable to compound growth over discrete periods, such as the payment and reinvestment of interest or dividends. Although continuous growth, as modelled by the exponential growth rate, may be more realistic, most economic phenomena are measured only at intervals, in which case the compound growth model is appropriate.

As with the exponential growth rate, the geometric growth rate does not take account intermediate values of the series.

Source Publication:
OECD, 2005, Data and Metadata Reporting and Presentation Handbook, OECD, Paris, Section 3: Guidelines for the reporting of different forms of data.

Statistical Theme: Methodological information (metadata)

Created on Monday, July 11, 2005

Last updated on Thursday, December 01, 2005