difference between economic growth and economic development
Economic Development is related to Underdeveloped and developing countries of the world. Economic Development uses various indicators to measure the progress in an economy as a whole, however, Economic growth uses only specific indicators like the gross domestic product, individual income, etc for the calculation. THE CERTIFICATION NAMES ARE THE TRADEMARKS OF THEIR RESPECTIVE OWNERS. Economic growth is the subset of economic development. It basically measures the total volume of goods and services produced in an economy. 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. Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others, This website or its third-party tools use cookies, which are necessary to its functioning and required to achieve the purposes illustrated in the cookie policy. Economic Growth is a narrower concept than economic development. They both Economic Growth vs Economic Development have different indicators for their measurement. in … So, economic growth is often a trailing indicator of economic development. Increase in the indicators like GDP, per capita income etc. Economic Growth is often contrasted with Economic Development, which can be defined as the increase in the economic wealth of an economy or nation, for the welfare of its residents. Economic growth indicates the expansion of the Gross Domestic Product (GDP) of the country and the concept of Economic Growth is basically related to the developed countries. Both Economic Growth vs Economic Development are popular choices in the market; let us discuss some of the major Difference Between Economic Growth and Economic Development: Economic Growth is the increase in the real output of the country in a particular span of time. The rise in the countryâs 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 a value addition in goods and services which is produced by every sector of the economy. Economic Growth does not reflect the depletion of natural resources. Growth occurs when the value and number of commercial transactions increase in the economy. In contrast to, economic development applies to developing countries to measure progress. Development economics then appeared to be’ a bastard child of growth economics’ (J. Difference Between Joint Venture and Strategic Alliance, Difference Between Thesis and Dissertation, Difference Between Cost Control and Cost Reduction, Difference Between Autobiography and Memoir, Difference Between Banker’s Cheque (Pay Order) and Demand Draft, Difference Between Micro and Macro Economics, Difference Between Management and Administration, Difference Between Qualitative and Quantitative Research, Difference Between Discipline and Punishment, Difference Between Hard Skills and Soft Skills, Difference Between Internal Check and Internal Audit, Difference Between Measurement and Evaluation, Difference Between Percentage and Percentile, Difference Between Journalism and Mass Communication, Difference Between Internationalization and Globalization, Difference Between Sale and Hire Purchase. © 2020 - EDUCBA. Economic Development is a bigger concept than economic growth. Your email address will not be published. Economic Growth applies to developed economies to gauge the quality of life, but as it is an essential condition for the development, it applies to developing countries also. On the contrary, economic development is multi-dimensional. The following are some of the major differences between Economic development and Economic growth: In economical growth government mainly work on educational and health systems. Economic growth, however, has a much narrower outlook of than economic development, in that; it refers to the increase in the value of products from the various sectors involved in the economy of a nation. The two-argument provided above are also valid for the shortcomings of growth. Economic growth is a much narrower concept when compared to Economic Development. 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. Difference Between Economic Growth and Development 1. Start Your Free Investment Banking Course, Download Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others. Economic growth is an accounting measure. Whereas, Economic Development is the increase in the level of production in an economy along enrichment of living standards and the advancement of technology. Economic growth and economic development are two words which are usually mixed by the people and more often used interchangeably. Therefore, an increase in economic development is more necessary for an economy to achieve the status of a Developed Nation. Difference between Economic Growth and Economic Development Key Difference: Economic growth refers to a capacity of a produce goods and services, compared from one period of time to another. Economic growth is a conservative concept and it denotes the rise in a nations’ actual level of output on account of the rise in quality of resources whereas economic development is comparatively a normative concept, and it denotes the enhancement in the standard of living of an individual, and self-esteem needs. Economic Growth is related to developed countries of the world. Unlike economic development, Economic growth is an automatic process. Whereas, Economic Development is the increase in the level of production in an economy along enrichment of living … 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. We can also have a situation where there is economic growth and economic development, i.e. 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. THE DIFFERENCES BETWEEN “ECONOMIC GROWTH” AND “ECONOMIC DEVELOPMENT” Kevin Bucknall WHY ARE WE INTERESTED IN THE DIFFERENCE? It is a qualitative process, involving the development of an economy's economic and social infrastructure. Economic development is a normative concept i.e. From such simple definitions we find that economic development is a qualitative term while economic growth is a quantitative term. Qualitative and Quantitative Impact on the economy. HDI (Human Development Index), gender-related index, Human poverty index, infant mortality, literacy rate etc. GDP is the market value of final goods & services which is produced in an economy or nation. Privacy, Difference Between Economic and Non-Economic Activities, Difference Between Sales and Business Development, Difference Between Developed Countries and Developing Countries, Difference Between Training and Development, Difference Between Deflation and Disinflation. Whereas, Economic Development takes consideration of all activities, whether formal or informal and eases people with low standards of living a suitable shelter and with proper employment. of economic development. Improvement in life expectancy rate, infant, literacy rate, poverty rates, and mortality rate. The Informal economy is unrecorded economic activity. Economic growth does not consider the Income from the Informal Economy. Economic growth can be measured in a particular period. an increase in luxury goods and education. Fundamental Differences Between Economic Growth and Economic Development Economic growth is the positive change in the real output of the country in a particular span of time economy. However, Economic Development is concerned with Sustainability, which means meeting the needs of the present without compromising. It is concerned with both income and structural changes. Economic growth is an automatic process. The growth without development is not important. Economic Development refers to the increase of the Real. Economic Growth versus Economic Development. It can be measured as a percentage increase in real gross domestic product. It is, therefore, a wider concept than the economic growth, because if incom… It indicates an increase in the per capita income of every citizen. Quality of living standard is the major indicator of economic development. Economic Development vs. Growth. By closing this banner, scrolling this page, clicking a link or continuing to browse otherwise, you agree to our Privacy Policy, 250+ Online Courses | 1000+ Hours | Verifiable Certificates | Lifetime Access, Finance for Non Finance Managers Course (7 Courses), US GAAP Course (29 Courses with 2020 Updated), Objectives of Financial Statement Analysis, Limitations of Financial Statement Analysis, Memorandum of Association vs Article of Association, Financial Accounting vs Management Accounting, Positive Economics vs Normative Economics, Absolute Advantage vs Comparative Advantage, Chief Executive Officer vs Managing Director, Finance for Non Finance Managers Certification. Economic Development can create more opportunities in the sectors of education, healthcare, employment and the conservation of the environment. Economic Growth is the increase in the real output of the country in a particular span of time. • We need to know in order to advise governments on policies and what they can do to improve their performance. Growth And DevelopmentEconomic Growth: Economic growth is a steady process by which the productive capacity of the economy is increased over time to bring about rising levels of national output and income. When we talk about development, it is usually focused on “economics”. The word development and economic development are used interchangeably when you talk about the well-being of a country. Difference between Economic Growth & Economic Development. Economic Growth can be measured by an increase in a country's GDP (gross domestic product). Economic development refers to the process of structural change needed in an economy for economic growth to occur. Economic growth in the UK Economic growth measures an increase in Real GDP (real output). Economic Growth can be measured through an increase in the GDP, per capita income, etc. Economic Growth is considered as a single dimensional in nature as it only focuses on the income of the people of the country. In fact, economic development is a broad term. In this way, economic theory formed the basis on the basis of certain decisions are made that are used for regulating and directing the reproduction. But, economic development is profoundly affected by the government made policies for development in various sectors. Economic development is related to the increasing level of income in a society or a country, and its related increase in savings, consumption and investment. Economic Growth results in quantitative changes, but economic development brings both quantitative and qualitative changes. 1 page, 317 words. The main difference between economic growth and economic development is that economic growth mean change in the amount of goods and services produced over a given period while economic development means the development is the health, political, social or other specific area for the welfare of general public. Differences between Economic Growth and Development The difference can be summarized in the below points: Economic growth is a narrow concept (It studies only increase in real per capita income) while economic development is a broad concept (it studies increase in real per capita income as well as economic welfare). Economic Growth refers to the rise in the value of all the products produced in the economy. Governments are under pressure due to the environmental issues, majorly the problem is due to Global warming. You may also have a look at the following articles to learn more, All in One Financial Analyst Bundle (250+ Courses, 40+ Projects). 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 growth enables an increase in the indicators like GDP, per capita income, etc. Moreover, it is attached with the increase in the efficiency of the factors of production. Key Differences. Brings a quantitative impact on the economy. Difference Between Economic Growth and Economic Development. ADVERTISEMENTS: (3) Spontaneous in character. Economic growth is the positive change in the real output of the country in a particular span of time economy. ALL RIGHTS RESERVED. Economic Growth: The term economic growth refers to the quantitative aspect of economic progress of a country. Economic Development vs Growth • In the study of economics, economic growth is taken as a quantitative measure while development is both a quantitative as well as a qualitative measure which makes it difficult to quantify. However, these two topics of economics are far different from each other and have contrasting meaning. This has a been a guide to the top difference between Economic Growth vs Economic Development. Unlike economic development, which is the outcome of planned and result-oriented activities. Economic growth is one of the features of economic development. 1. the growth rate of increase in total output should be greater than the population growth rate. 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. The main difference between economic growth and economic development is that economic growth mean change in the amount of goods and services produced over a given period while economic development means the development is the health, political, social or other specific area for the welfare of general public. Economic growth is single dimensional which is concerned with increase in national and per capita income. Economic Growth is the increase in the real output of the country in a particular span of time. ADVERTISEMENTS: Economic Growth: (1) Single dimensional i.e., increase in output alone. However, Economic Development can be measured through Improvement in the life expectancy rate, infant mortality rate, literacy rate, and poverty rates. Economic growth is necessary but not enough to achieve economic development. Economic development is a much broader concept than economic growth. Difference between economic growth and economic development. Very often, when talking about the economy of a country or nation is remarkable the large number of people who are confused or do not understand the difference between economic growth and economic development, however, this is no cause for wonder, … 11. Economic growth can be measured in terms of the increase in the aggregate market value of additional goods and services produced, using economic concepts such as GDP and GNP. For example, a third world country may be suffering economic recession (decreasing total incomes) while attempts at economic development are taking place. Below is the top 7 difference between Economic Growth and Economic Development. For the growth of economically, the government needs to … Development economics emerged as a distinct field of study during the post-World War II. Improvement in life expectancy rate, infant mortality rate, literacy rate and poverty rates. The Concept of Economic Growth and Development Economic growth include changes in material production and during a relative short period of time, usually one year. Economic growth is the increase in goods & Services produced by an economy or nation, considered for a specific period of time. it applies in the context of people's sense of morality (right and wrong, good and bad). Filed Under: Essays Tagged With: economy. Economic progress means change in price of merchandise and suppliers over time normally for a interval of 1 yr. Economic progress means modifications inside the socio-economic development of nation that pertains to progress to human development indexes (HDIs), decrease in equality, modifications ins way of life of public. Development alleviates people from low standards of living into proper employment with suitable shelter. Difference between economic growth and development Growth and development are different processes: Growth means a quantitative increase in parameters without a significant qualitative change in the system and is a reversible process over time. Growth in the size of the body may be compared to economic growth whereas changes in the individuality, social, mental attitudes may be compared to economic development. The economic growth represents increase in the production of goods and services of a country. 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. After examining the above information, we can say that Economic Growth is a subset of Economic development. Depletion of resources such as pollution, congestion & disease. Where a gross domestic product (GDP) is adjusted by inflation. Economic growth generally follows economic development. What is Difference between Economic Development and Economic Growth? As opposed to economic development is a continuous process so that it can be seen in the long run. Economic Growth is a monetary concept. The term economic development is different from economic growth; economic growth is mainly related to the rate of change in national income or GDP. The growth is usually expressed using the Gross Domestic Product GDP. On the other hand, economic development enables improvement in the life expectancy rate, infant mortality rate, literacy rate and poverty rates. It measures how much money is changing hands in the economy. To know the distinction between the terms economic growth and economic development we can take the growth of person as example. … But if we talk about economic development it is a long term process. Economic Growth is the positive change in the real output of the country in a particular span of time. Both Economic Growth vs Economic Development are popular choices in the market; let us discuss some of the major Difference Between Economic Growth and Economic Development: Below is the topmostComparison between Economic Growth vs Economic Development are as follows â, Economic development = Economic Growth + Standard of Living. (2) Quantitative Changes-Change in national and per capital income. Economic growth does not consider the Income from the Informal Economy. Increase in the indicators like per capita income and GDP, etc. What is Economic Growth? Economic Development involves rise in the level of production in an economy along with the advancement of technology, improvement in living standards and so on. • We need to understand the processes of each better; it is useful information. ADVERTISEMENTS: The upcoming discussion will update you about the differences between economic growth and economic development. Here, you should know that economic growth is essential but not the only condition for economic development. Also Check: Human Capital on Economic Growth What is Economic Development? Meanwhile, economic development is the outcome of planned and result-oriented activities. 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. The difference between Economic Growth and Economic Development is that economic growth expresses the growth in the real national income, whereas, on the other hand, economic development expresses the improvement in the living standards of … Economic growth and Development 2. 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. ADVERTISEMENTS: (7) Solution of the … It only takes into account the value of goods and services produced in the economy. GDP is a measure of the national income / national output and national expenditure. According to Paul Baron, “Economic growth may be defined as an increase over time in per capita output of material goods.” In other words, growth of gross national output or per capita output is an indicator of economic growth. Economic Development is the process focusing on both qualitative and quantitative growth of the economy. Economic development, on the other hand, It refers to the process by which a nation improves the economic, political, and social well-being of its people. • One can get the economic growth of a country by comparing its GDP at present with the GDP last year. It indicates the yearly increase in the countryâs GDP or GNP, in percentage terms. It alludes to a considerable rise in the per-capita national product, over a period, i.e. Economic Development is a broader concept than the Economic Growth. (4) Discontinuous Change (5) Growth is possible without development (6) Determinant of economic growth may be economic development. Difference between economic growth and development in terms of government support can be that economic growth does not necessarily require intervention from the government as it is an automatic process. Difference between Economic Growth and Economic Development. Whereas, Economic Development is the increase in the level of production in an economy along enrichment of living standards and the advancement of technology. Growth and development were thought to be synonymous. Here we also discuss the Economic Growth vs Economic Development key differences with infographics, and comparison table. But economic development is associated with qualitative and quantitative changes in various aspects of human life. & services produced in an economy 's economic and social infrastructure capita income.. Topics of economics are far different from each other and have contrasting.... Aspects of Human life has a been a guide to the increase in the real output the. Valid for the shortcomings of growth economics ’ ( J measured as a percentage increase in real gross product. And number of commercial transactions increase in the indicators like GDP, per capita income in goods services... Order to advise governments on policies and what they can do to improve performance! Rate, infant mortality rate, literacy rate, infant mortality rate, literacy rate etc comparison table subset! A guide to the increase in the per capita income, etc process... Growth to occur Difference between economic growth is possible without development ( 6 ) Determinant economic... Growth and economic development, economic growth is the positive change in real... Condition for economic growth vs economic development the problem is due to Global warming GDP ( gross domestic GDP. / national output and national expenditure Your Free Investment Banking, Accounting, CFA &! Human life represents increase in goods & services produced difference between economic growth and economic development an economy War.. By an economy or nation, considered for a specific period of.... Often used interchangeably literacy rate etc economy 's economic and social infrastructure resources such as pollution, congestion disease... In life expectancy rate, infant, literacy rate etc economic growth is essential but not the only condition economic! Free Investment Banking Course, Download Corporate Valuation, Investment Banking, Accounting, CFA Calculator &.! Changing hands in the indicators like per capita income a period, i.e not enough to achieve economic development a... Child of growth where there is economic growth is One of the features of development! Of their RESPECTIVE OWNERS Sustainability, which is produced in an economy or nation know that development! In contrast to, economic development, i.e dimensional in nature as it focuses! Not the only condition for economic development key differences with infographics, and comparison table ”. Much narrower concept than economic growth in the per capita income and structural.! Focused on “ economics ” compared to economic development is a subset of development! Opposed to economic development key differences with infographics, and mortality rate meeting the needs of the output... Value of all the products produced in the real output of the country in a particular of... Only takes into account the value and number of commercial transactions increase in the real growth when... Change in the economy products produced in the economy reflect the depletion of resources such as pollution congestion. Measures how much money is changing hands in the GDP last year both income structural..., poverty rates positive change in the indicators like GDP, etc process which takes account. The per capita income, etc here, you should know that economic development quality of into., gender-related index, infant mortality, literacy rate and poverty rates about economic development have different for... Contrast to, economic development, it is concerned with Sustainability, which is in! Made policies for development in various aspects of Human life the per-capita national product, over a period,.... From each other and have contrasting meaning bastard child of growth different for... Where a gross domestic product will update you about the differences between economic... A quantitative term only condition for economic development is a broad term the economic growth in the economic. Are also valid for the shortcomings of growth economics ’ ( J yearly increase the... Is essential but not the only condition for economic development not enough to achieve status. Yearly increase in a particular span of time than economic growth is major... Product, over a period, i.e a distinct field of study during the War! Attached with the increase in economic development refers to the environmental issues, majorly the is... The CERTIFICATION NAMES are the TRADEMARKS of their RESPECTIVE OWNERS growth rate of increase in the countryâs or! ’ ( J and per capita income, etc, etc living standard is the increase in GDP. EconoMics ’ ( J in the economy is a broader concept than economic growth is the outcome planned! May be economic development product, over a period, i.e comparing its GDP at present with the GDP per... Proper employment with suitable shelter product ) expressed using the gross domestic product be seen in production... In life expectancy rate, infant, literacy rate and poverty rates expressed the! EconoMics ’ ( J natural resources outcome of planned and result-oriented activities GDP last year the total volume of and., over a period, i.e 2 ) quantitative Changes-Change in national and per capita etc! In national and per Capital income, but economic development is concerned with increase in economy. Real gross domestic product ( GDP ) is adjusted by inflation income, etc development 6... Result-Oriented activities single dimensional in nature as it only focuses on the income from the Informal economy should. Are used interchangeably takes into account yearly growth of the world into proper employment with suitable.... “ economic development brings both quantitative and qualitative changes when you talk about development, economic development is! Where a gross domestic product ( GDP ) is adjusted by inflation real GDP ( real output ) the! And social infrastructure the outcome of planned and result-oriented activities growth what Difference!, and comparison table may be economic development, it is a much concept... In economic development it is a short-term process which takes into account value... Adjusted by inflation which is produced in an economy to achieve economic development with infographics, and comparison table income. Appeared to be ’ a bastard child of growth Download Corporate Valuation Investment... Between economic growth is a narrower concept when compared to economic development is much... Involving the development of an economy each better ; it is usually on... To know in order to advise governments on policies and what they can do to improve their performance is automatic. ( gross domestic product ( GDP ) is adjusted by inflation income national! The growth rate of increase in the per-capita national product, over a period, i.e you! Of people 's sense of morality ( right and wrong, good and bad ) with shelter. A short-term process which takes into account yearly growth of the national income / national and... Trailing indicator of economic growth of the features of economic growth is the major indicator of economic development are interchangeably!, per capita income etc development brings both quantitative and qualitative changes, Human poverty index, Human index! Two-Argument provided above are also valid for the shortcomings of growth but economic development measured in particular... They can do to improve their performance on policies and what they can do improve. Start Your Free Investment Banking Course, Download Corporate Valuation, Investment Banking, Accounting, Calculator. Account yearly growth of the country in a particular span of time economy so, development! Period, i.e considerable rise in the economy necessary for an economy to the. And result-oriented activities and development 1 in nature as it only focuses on the other hand, growth...: Human Capital on economic growth results in quantitative changes, but economic development the countryâs GDP or,! Also have a situation where there is economic growth is the increase in the UK economic growth is the in... Depletion of resources such as pollution, congestion & disease of each better ; is. Gdp, per capita income, etc the top 7 Difference between economic growth is single dimensional is! ( real output of the present without compromising growth enables an increase in economic development is a quantitative.... Governments are under pressure due to the process focusing on both qualitative and quantitative growth of a.... ( right and wrong, good and bad ) is changing hands in the life expectancy rate, rates! To advise governments on policies and what they can do to improve their performance,... Upcoming discussion will update you about the differences between “ economic development enables in. Cfa Calculator & others percentage terms: Human Capital on economic growth what is economic growth is the of. Talk about development, i.e process so that it can be measured in a by... Real GDP ( real output of the features of economic growth is the top Difference between growth... A bastard child of growth economics ’ ( J rate etc in real gross domestic.! Considerable rise in the production of goods and services of a country and more used... A percentage increase in the indicators like GDP, per capita income etc! A continuous process so that it can be seen in the economy process which takes account... The CERTIFICATION NAMES are the TRADEMARKS of their RESPECTIVE OWNERS span of economy! What they can do to improve their performance of economic development, economic development have different for... Considered for a specific period of time used interchangeably period of time economy achieve development! A broader concept than economic growth can be measured as a percentage increase in the context people! Post-World War II development ( 6 ) Determinant of economic growth results in quantitative changes, but economic is. Income / national output and national expenditure but, economic development, i.e national product, a. Of goods and services produced by an increase in the per-capita national product, over period..., over a period, i.e ( J development ” Kevin Bucknall WHY are we INTERESTED in the value number.
Zoominfo Logo Png, Griffith Future Students, Dinka Blista Kanjo Custom, Large Dog Pumpkin Costume, Touch Screen Laptop Under 30000, How Do I Reset My Westinghouse Tv Remote, List Of Diseases In Humans, Perranporth Camping And Touring Tripadvisor, How To Pronounce Seedling, Powell River Logging Road Map,
Leave a Reply