Can you distinguish between economic growth

Measure of Economic Growth is quantitative in nature because it is concerned with how much of goods and services are produced in the country in a certain period of time.

Economic Development is qualitative in nature because it focuses on improving the quality of life of the people in the country. Wealth distribution Economic Growth does not focus on fair distribution of wealth among the people in the country. Economic Development concentrates on a balanced growth of the economy and fair and equitable distribution of the wealth among the people. Like Dislike Related Differences. Economic Growth refers to the increase in the value of the real output of goods and services in the country.

Economic Growth is a measure for measuring how much money is flowing from one individual to another individual in the economy. Economic Growth is considered as one of the instruments for achieving Economic Development.

Economic Growth is considered as a narrow measure and single dimensional in nature as it only focuses on the income of the people of the country. Economic Growth is a short term process as changes in income is calculated every year generally. Average life expectancy compared to a global expected life expectancy. Educational standards and labour productivity. Basic levels of literacy and education can determine the productivity of the workforce.

Levels of inward investment. For example, China has invested in many African countries to help export raw materials, that its economy needs. Labour mobility. Is labour able to move from relatively unproductive agriculture to more productive manufacturing? The flow of foreign aid and investment. Targeted aid, can help improve infrastructure and living standards. Level of savings and investment. Higher savings can fund more investment, helping economic growth.

Economic growth without development It is possible to have economic growth without development. For example, if a country produces more oil, it will see an increase in GDP. A country may see higher GDP, but the benefits of growth may be syphoned into the bank accounts of politicians Environmental problems.

Producing toxic chemicals will lead to an increase in real GDP. However, without proper regulation, it can also lead to environmental and health problems.

This is an example of where growth leads to a decline in living standards for many. Economic growth can cause an increase in congestion. This means people will spend longer in traffic jams. GDP may increase but they have lower living standards because they spend more time in traffic jams. Production not consumed. If a state-owned industry increases output, this is reflected in an increase in GDP.

However, if the output is not used by anyone then it causes no actual increase in living standards. Military spending. A country may increase GDP by spending more on military goods. However, if this is at the expense of health care and education it can lead to lower living standards. Evaluation It depends on the nature of economic growth.

Are the proceeds of growth used to improve living standards? Might be useful to use statistics like the Human Development Index which look at real GDP, but also education and health care indexes. Causes of economic growth.

Thanks Reply. Good explanation for differents, but what is similarity Reply. Many thanks for your well providing Reply. We use cookies on our website to collect relevant data to enhance your visit. Our partners, such as Google use cookies for ad personalization and measurement. However, you may visit "Cookie Settings" to provide a controlled consent. Cookie Settings Close and accept all.

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Popular Course in this category. Course Price View Course. Free Investment Banking Course. Login details for this Free course will be emailed to you. Email ID. Contact No. Economic development is a much broader concept than economic growth. 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. Economic Growth is often contrasted with Economic Development , which is defined as the increase in the economic wealth of a country or a particular area, for the welfare of its residents.

Here, you should know that economic growth is an essential but not the only condition for economic development. The economic trend in a country as a whole, is the major component for its business environment.

An economy whose growth rate is high provides a promising business prospect and thus builds business confidence. In this article, you will find all the substantial differences between economic growth and economic development. 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. Improvement in life expectancy rate, infant mortality rate, literacy rate and poverty rates. 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. Continuous process. Economic Growth is defined as the rise in the money value of goods and services produced by all the sectors of the economy per head during a particular period. It is a quantitative measure that shows the increase in the number of commercial transactions in an economy. Economic growth can be expressed in terms of gross domestic product GDP and gross national product GNP , that helps in measuring the size of the economy.