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Economic growth and economic development - development economics
Typology: Study notes
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Economic Growth is defined as the rise in the money value of goods and services produced by all the sectors of the economy per head during a particular period. It is a quantitative measure that shows an increase in national income or per capita income. Economic growth can be expressed in terms of gross domestic product (GDP) and gross national product (GNP) that helps in measuring the size of the economy. Economic Development is defined as the process of increase volume of production along with the improvement in technology, a rise in the level of living, institutional changes, etc. In short, it is the progress in the socio-economic structure of the economy. It is a multidimensional process involving major changes in social structures, popular attitudes, and national institutions, as well as the acceleration of economic growth, the reduction of inequality, and the eradication of poverty. It considers the overall development in an economy regarding the standard of living, GDP, living conditions, technological advancement, improvement in self-esteem needs, the creation of opportunities, per capita income, infrastructural and industrial development and much more. The fundamental differences between economic growth and development are explained in the points given below: Economic growth is the positive change in the real output of the country in a particular span of time economy. Economic Development involves a rise in the level of production in an economy along with the advancement of technology, improvement in living standards and so on. Economic growth is a quantitative concept while economic development is a qualitative concept. Economic growth is one of the features of economic development. Economic Growth is considered as a single dimensional in nature as it only focuses on the income of the people of the country. Economic Development is considered as a Multidimensional phenomenon because it focuses on the income of the people and on the improvement of the living standards of the people of the country. Economic growth is an automatic process. Economic development is the outcome of planned and result-oriented activities. Economic growth enables an increase in the indicators like GDP, per capita income, etc. On the other hand, economic development enables improvement in the life expectancy rate, infant mortality rate, literacy rate and poverty rates. Economic growth can be measured when there is a positive change in the national income, whereas economic development can be seen when there is an increase in real national income.
Economic growth is a short-term process which takes into account yearly growth of the economy. But if we talk about economic development it is a long term process. Economic Growth applies to developed economies to measure the quality of life, but as it is an essential condition for the development, it applies to developing countries also. In contrast to, economic development applies to developing countries to measure progress. (^) Economic Growth results in quantitative changes, but economic development bring both quantitative and qualitative changes. Economic growth can be measured in a particular period. Economic development is a continuous process so that it can be seen in the long run.