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Economic Development Economic Growth: Comparison Chart

Economic growth refers to an increase in a country's gross national product or gross domestic product from one year to the next. It can result from increases in capital stock, technology, or education levels. Economic development is a broader concept that involves qualitative improvements to living standards, opportunities, and sustainability. While economic growth focuses only on quantitative increases in output, economic development encompasses additional factors like literacy, health, environmental protection, and human rights. Economic growth is necessary but not sufficient for economic development.

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74 views

Economic Development Economic Growth: Comparison Chart

Economic growth refers to an increase in a country's gross national product or gross domestic product from one year to the next. It can result from increases in capital stock, technology, or education levels. Economic development is a broader concept that involves qualitative improvements to living standards, opportunities, and sustainability. While economic growth focuses only on quantitative increases in output, economic development encompasses additional factors like literacy, health, environmental protection, and human rights. Economic growth is necessary but not sufficient for economic development.

Uploaded by

bhagat103
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Economic Growth

Increase in a country's productive capacity, as measured by comparing gross national product (GNP) in a year with
the GNP in the previous year.

Increase in the capital stock, advances in technology, and improvement in the quality and level of literacy are


considered to be the principal causes of economic growth. In recent years, the idea of sustainable development has
brought in additional factors such as environmentally sound processes that must be taken into account in growing
an economy.

Economic development

Progress in an economy, or the qualitative measure of this. Economic development usually refers to the adoption
of new technologies, transition from agriculture-based to industry-based economy, and general improvement in
living standards.

Economic Growth is a narrower concept than economic development.It is an increase in a country's real level of
national output which can be caused by an increase in the quality of resources (by education etc.), increase in the
quantity of resources & improvements in technology or in another way an increase in the value of goods and
services produced by every sector of the economy. Economic Growth can be measured by an increase in a
country's GDP (gross domestic product).

Economic development is a normative concept i.e. it applies in the context of people's sense of morality (right and
wrong, good and bad). The definition of economic development given by Michael Todaro is an increase in living
standards, improvement in self-esteem needs and freedom from oppression as well as a greater choice. The most
accurate method of measuring development is the Human Development Index which takes into account the
literacy rates & life expectancy which affect productivity and could lead to Economic Growth. It also leads to the
creation of more opportunities in the sectors of education, healthcare, employment and the conservation of the
environment.It implies an increase in the per capita income of every citizen.

Economic Growth does not take into account the size of the informal economy. The informal economy is also
known as the black economy which is unrecorded economic activity. Development alleviates people from low
standards of living into proper employment with suitable shelter. Economic Growth does not take into account the
depletion of natural resources which might lead to pollution, congestion & disease. Development however is
concerned with sustainability which means meeting the needs of the present without compromising future needs.
These environmental effects are becoming more of a problem for Governments now that the pressure has
increased on them due to Global warming.

Economic growth is a necessary but not sufficient condition of economic development.

Comparison chart
Improve this chart
Economic Economic Growth
Development
Implications: Economic development implies Economic growth refers to an increase
changes in income, savings and in the real output of goods and
investment along with progressive services in the country.
changes in socio-economicstructure
of country (institutional
Improve this chart
Economic Economic Growth
Development
and technological changes).

Factors: Development relates to growth Growth relates to a gradual increase in


ofhuman capital indexes, a decrease one of the components of Gross
in inequality figures, Domestic Product: consumption,
and structuralchanges that improve government spending, investment, net
the general population's quality of exports.
life.

Measurement: Qualitative.HDI (Human Quantitative. Increase in real GDP.


Development Index), gender- related Shown by PPF.
index (GDI), Human poverty index
(HPI), infant mortality, literacy rate
etc.

Effect: Brings qualitative and quantitative Brings quantitative changes in the


changes in the economy economy

Concept: Normative concept Narrower concept than economic


development

Relevance: Economic development is more Economic growth is a more relevant


relevant to measure progress metric for progress in developed
andquality of life in developing countries. But it's widely used in all
nations. countries because growth is a
necessary condition for development.

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