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Differences Between Economic Growth and Economic Development

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7 views

Differences Between Economic Growth and Economic Development

Uploaded by

heno.tade
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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9 Differences Growth and Economic

Development
The terms ‘economic growth’ and ‘economic development’ sound similar. However, the two
concepts are different. While economic growth is a quantitative concept, economic development
is a qualitative concept.

What is Economic Growth?


Economic growth can be referred to as the increase that is witnessed in the monetary value of all
the goods and services produced in the economy during a time period. It is a type of quantitative
measure that reflects the potential increase in the number of business transactions taking place in
the economy.

It can be measured in terms of the increase in the aggregate market value of additional goods and
services produced by using economic concepts such as GDP and GNP.

Economic growth is a narrow concept when compared to economic development.

Also Check: Human Capital on Economic Growth

What is Economic Development?


Economic development refers to the process by which the overall health, well-being, and
academic level of the general population of a nation improves. It also refers to the improved
production volume due to the advancements of technology.

It is the qualitative improvement in the life of the citizens of a country and is most appropriately
determined by the Human Development Index (HDI). The overall development of a country is
based on many parameters such as the creation of job opportunities, technological advancements,
standard of living, living conditions, per capita income, quality of life, improvement in self-
esteem needs, GDP, industrial and infrastructural development, etc.

Let us look into the most significant points of difference between economic growth and
economic development from the following table:

Economic Growth Economic Development


Definition
It refers to the increase in the monetary growth of a It refers to the overall development of the quality of life in a
nation in a particular period. nation, which includes economic growth.
Span of Concept
It is a narrower concept than that of economic It is a broader concept than that of economic growth.
development.
Scope
It is a uni-dimensional approach that deals with the It is a multi-dimensional approach that looks into the income
economic growth of a nation. as well as the quality of life of a nation.
Term
Short-term process Long-term process
Measurement
Quantitative Both quantitative and qualitative
Applicable to
Developed economies Developing economies
Government Support
It is an automatic process that may or may not require It requires intervention from the government as all the
intervention from the government developmental policies are formed by the government
Kind of changes expected
Quantitative changes Quantitative as well as qualitative changes
Examples
GDP, GNP HDI, per capita Income, industrial development

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