Final answer:
Growth assets refer to asset classes such as stocks and real estate, which offer the potential for higher long-term returns and involve higher risk. These assets play a significant role in the accumulation of physical and human capital, contributing to economic growth. Growth accounting studies examine the impact of these and other factors, including technological advancements, on economic expansion.
Step-by-step explanation:
The two asset classes that are commonly referred to as 'growth assets' are stocks and real estate. Growth assets are distinguished from other types of investments such as bonds or bank accounts, as they have the potential for higher returns over the long term, along with higher risk. Stocks represent ownership in a company and can appreciate in value as the company grows and becomes more profitable. Similarly, real estate can increase in value over time and provide rental income as well as potential capital gains. Both forms of investment are essential for capital accumulation and can significantly influence the growth in physical capital and human capital, which are key components of economic growth.
As discussed in growth accounting studies, increases in physical capital, like machinery and buildings, and improvements in human capital, through education and training, contribute to economic growth. However, when these factors don't fully explain economic expansion, the residual growth is often attributed to advancements in technology. For individuals and households looking to build wealth, investing in growth assets is a slow and reliable method, which contrary to get-rich-quick schemes, can prove to be very effective over a lifetime.