Economic Growth vs. Economic Development

Introduction

 

INTRODUCTION

Hello guys! welcome to the world of economics

A country's economic health can usually be measured by looking at that country's economic growth and development. This lesson defines and explains the difference of economic growth and economic development.

Nature of the lesson

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.

Economic development is a normative concept i.e. it applies in the context of peoples 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 capital 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 capital 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 . 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.

 

     
     
     
     
     
     
     
     
     
   

Task

Objectives 

At the end of the lesson students are expected to:

a. come up with their own definitions of economic growth and economic development

b. discussed the concept of economic growth and economic development

 

Process

1. Read this the comparison chart

Comparison Chart

 

BASIS FOR COMPARISON ECONOMIC GROWTH ECONOMIC DEVELOPMENT
Meaning Economic Growth is the positive change in the real output of the country in a particular span of time. 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.
Concept Narrow Broad
Scope Increase in the indicators like GDP, per capita income etc. Improvement in life expectancy rate, infant mortality rate, literacy rate and poverty rates.
Term Short term process Long term process
Applicable to Developed Economies Developing Economies
How it can be measured? Upward movement in national income. Upward movement in real national income.
Which kind of changes are expected? Quantitative changes Qualitative and quantitative changes
Type of process Automatic Manual
When it arises? In a certain period of time

2..Click the link below an then watch the video in order for you to understand well the concept of economic growth and economic development.

Economic Growth and Development - A Comparison - YouTube

Video for video about economic growth and economic development▶ 6:23

https://www.youtube.com/watch?v=3Vo76aAi62Q

3.. After watching, come up with one best concept or  idea describing the definition of economic growth and economic development. Remember that it should be in a form of drawing.

Evaluation

Rubrics

Content            10 pts.

creativeness     10 pts.

            overall  20 pts.

Conclusion

 

Economic Growth refers to the rise in the value of everything produced in the economy. It implies the yearly increase in the country’s GDP or GNP, in percentage terms. It alludes to considerable rise in per-capita national product, over a period, i.e. the growth rate of increase in total output, must be greater than the population growth rate. Economic development is a normative concept i.e. it applies in the context of peoples 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 capital 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 capital income of every citizen.

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

Credits