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Economic Growth and Development.pptx

Economic growth refers to the increase in the production of goods and services in an economy, typically measured by GDP, while economic development encompasses both qualitative and quantitative improvements in living standards and well-being. Economic growth is often a precursor to economic development, which focuses on reducing poverty and inequality and enhancing overall quality of life. The two concepts differ in their scope, with economic growth being a narrower, short-term measure and economic development being broader and more long-term in nature.

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8 views6 pages

Economic Growth and Development.pptx

Economic growth refers to the increase in the production of goods and services in an economy, typically measured by GDP, while economic development encompasses both qualitative and quantitative improvements in living standards and well-being. Economic growth is often a precursor to economic development, which focuses on reducing poverty and inequality and enhancing overall quality of life. The two concepts differ in their scope, with economic growth being a narrower, short-term measure and economic development being broader and more long-term in nature.

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kunokajnai
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Economic Growth VS Economic Development

Economic growth: Economic growth is the increase in goods & services produced
by an economy or nation, considered for a specific period of time. The rise in the
country’s output of goods and services is steady and constant and may be caused by
an improvement in the quality of education, improvements in technology, or in any
way if there is value addition in goods and services which is produced by every
sector of the economy.

It can be measured as a percentage increase in real gross domestic product. Where a


gross domestic product (GDP) is adjusted by inflation. GDP is the market value of
final goods & services which is produced in an economy or nation.
Economic Development
Economic Development is the process focusing on both qualitative and
quantitative growth of the economy. It measures all the aspects which include
people in a country become wealthier, healthier, better educated, and have
greater access to good quality housing. Economic Development can create
more opportunities in the sectors of education, healthcare, employment, and
the conservation of the environment. It indicates an increase in the per capita
income of every citizen. The standard of living includes various things like
safe drinking water, improve sanitation systems, medical facilities, the spread
of primary education to improve literacy rate, eradication of poverty, balanced
transport networks, increase in employment opportunities, etc. Quality of
living standard is the major indicator of economic development. Therefore, an
increase in economic development is more necessary for an economy to
achieve the status of a Developed Nation. It can be measured by the Human
Development Index, which considers the literacy rates & life expectancy
which affect productivity and could lead to Economic Growth
Example: To understand the two terms, we will take an example of a
human being. The term growth of human beings simply means the
increase in their height and weight which is purely physical. But if you
talk about human development, it will take into account both the
physical and abstract aspects like maturity level, attitudes, habits,
behaviour, feelings, intelligence, and so on.

In the like manner, growth of an economy can be measured through the


increase in its size in the current year in comparison to previous years,
but economic development includes not only physical but also
non-physical aspects that can only be experienced like improvement in
the lifestyle of the inhabitants, increase in individual income,
improvement in technology and infrastructure etc.
Difference between Economic Growth and Economic Development
Economic Growth Economic Development
Economic Growth is the positive change in the indicators of Economic development is the quantitative and qualitative
economy. change in an economy.
Economic Growth refers to the increment in amount of Economic development refers to the reduction and elimination
goods and services produced by an economy of poverty, unemployment and inequality with the context of
growing economy.
Economic growth means an increase in real national income Economic development means an improvement in the quality
/ national output. of life and living standards, e.g. measures of literacy,
life-expectancy and health care.
It refers to an increase over time in a country’s real output of Economic development includes process and policies by
goods and services (GNP) or real output per capita income which a country improves the social, economic and political
well-being of its people.
Economic growth focuses on production of goods and Economic development focuses on distribution of resources.
services.
Economic growth relates a gradual increase in one of the Economic development relates to growth of human capital
components of GDP; consumption, government spending, indexes and decrease in inequality. It is concerned with how
investment or net exports. people are affected.
Economic growth Economic Development
Economic growth is single dimensional in nature as it Economic development is multi-dimensional in nature
only focuses on income of the people. as it focuses on both income and improvement of
living standards of the people
Economic Growth is the precursor and prerequisite for Economic development comes after economic growth.
economic development. It is the subset of economic It is a positive impact of economic growth.
development
Indicators of economic growth are: Indicators of economic development are:
1) GDP 1) Human Development Index (HDI)
2)GNI 2) Human Poverty Index (HPI)
3)Per capita income 3) Gini Coefficient
4) Gender Development Index (GDI)
5) Balance of trade
6) Physical Quality of Life Index (PQLI)
It is for short term/short period. It is measured in It is a continuous and long-term process. Economic
certain time frame/period. development does not have specific time period to
measure
Economic growth only looks at the quantitative aspect. Economic development brings quantitative and
It brings quantitative changes in the economy. qualitative change in the economy
Economic growth Economic Development

Economic growth is an automatic process that may or Economic development requires intervention from the
may not require intervention from the government government as all the developmental policies are
formed by the government
It refers to increase in production. It refers to increase in productivity
It is the means of development. It is the ends of development.
Economic growth is relatively narrow concept as It is a broader concept than economic growth.
compared to economic development.

Economic growth is concerned with increase in It is concerned with structural changes in the economy.
economy’s output. Economic development= Economic growth + standard
of living

It is not concerned with happiness of public life. It is concerned with happiness of public life.

Poverty and inequality may remain in economic Achieving economic development is linked with end of
growth poverty and inequality.
Economic growth is more relevant metric for assessing More relevant to measure progress and quality of life
progress in developed countries in developing countries.
It is a material/physical concept. It is more abstract concept.

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