It is a qualitative process, involving the development of an economy's economic and social infrastructure. 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. Quality of living standard is the major indicator of economic development. THE DIFFERENCES BETWEEN “ECONOMIC GROWTH” AND “ECONOMIC DEVELOPMENT” Kevin Bucknall WHY ARE WE INTERESTED IN THE DIFFERENCE? © 2020 - EDUCBA. 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. … Economic growth is the positive change in the real output of the country in a particular span of time economy. In fact, economic development is a broad term. 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 … 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. ADVERTISEMENTS: (7) Solution of the … Start Your Free Investment Banking Course, Download Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others. 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. On the contrary, economic development is multi-dimensional. Here, you should know that economic growth is essential but not the only condition for economic development. Qualitative and Quantitative Impact on the economy. Whereas, Economic Development is the increase in the level of production in an economy along enrichment of living … Development economics then appeared to be’ a bastard child of growth econo­mics’ (J. Economic Growth is a monetary concept. You may also have a look at the following articles to learn more, All in One Financial Analyst Bundle (250+ Courses, 40+ Projects). Below is the top 7 difference between Economic Growth and Economic Development. Economic development is a normative concept i.e. Increase in the indicators like GDP, per capita income etc. It can be measured as a percentage increase in real gross domestic product. Growth and development were thought to be synonymous. • We need to know in order to advise governments on policies and what they can do to improve their performance. Also Check: Human Capital on Economic Growth What is 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. Economic Growth results in quantitative changes, but economic development brings both quantitative and qualitative changes. (2) Quantitative Changes-Change in national and per capital income. 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. 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. Here we also discuss the Economic Growth vs Economic Development key differences with infographics, and comparison table. 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. Economic Development can create more opportunities in the sectors of education, healthcare, employment and the conservation of the environment. Economic development is a much broader concept than economic growth. However, Economic Development can be measured through Improvement in the life expectancy rate, infant mortality rate, literacy rate, and poverty rates. Economic Growth refers to the rise in the value of all the products produced in the economy. Brings a quantitative impact on the economy. Difference between Economic Growth & 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. From such simple definitions we find that economic development is a qualitative term while economic growth is a quantitative term. 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). 11. Economic growth can be measured in a particular period. of economic development. 1. 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 Concept of Economic Growth and Development Economic growth include changes in material production and during a relative short period of time, usually one year. Therefore, an increase in economic development is more necessary for an economy to achieve the status of a Developed Nation. 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. Economic Growth is the increase in the real output of the country in a particular span of time. • One can get the economic growth of a country by comparing its GDP at present with the GDP last year. Economic growth in the UK Economic growth measures an increase in Real GDP (real output). • We need to understand the processes of each better; it is useful information. Economic Growth is the increase in the real output of the country in a particular span of time. For example, a third world country may be suffering economic recession (decreasing total incomes) while attempts at economic development are taking place. Economic growth generally follows economic development. Economic growth is the increase in goods & Services produced by an economy or nation, considered for a specific period of time. 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 is an accounting measure. Moreover, it is attached with the increase in the efficiency of the factors of production. Where a gross domestic product (GDP) is adjusted by inflation. 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. Economic Growth is considered as a single dimensional in nature as it only focuses on the income of the people of the country. Economic Development refers to the increase of the Real. Economic Growth can be measured by an increase in a country's GDP (gross domestic product). Increase in the indicators like per capita income and GDP, etc. 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. To know the distinction between the terms economic growth and economic development we can take the growth of person as example. It basically measures the total volume of goods and services produced in an economy. Economic Development is a bigger concept than economic growth. Economic Growth is related to developed countries of the world. It measures all the aspects which include people in a country become wealthier, healthier, better educated, and have greater access to good quality housing. What is Difference between Economic Development and Economic Growth? 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. THE CERTIFICATION NAMES ARE THE TRADEMARKS OF THEIR RESPECTIVE OWNERS. Growth occurs when the value and number of commercial transactions increase in the economy. It measures how much money is changing hands in the economy. On the other hand, economic development enables improvement in the life expectancy rate, infant mortality rate, literacy rate and poverty rates. 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. After examining the above information, we can say that Economic Growth is a subset of Economic development. However, these two topics of economics are far different from each other and have contrasting meaning. 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. But if we talk about economic development it is a long term process. 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. 1 page, 317 words. What is Economic Growth? It only takes into account the value of goods and services produced in the economy. 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. Governments are under pressure due to the environmental issues, majorly the problem is due to Global warming. the growth rate of increase in total output should be greater than the population growth rate. But, economic development is profoundly affected by the government made policies for development in various sectors. It indicates the yearly increase in the country’s GDP or GNP, in percentage terms. Economic Development is a broader concept than the Economic Growth. But economic development is associated with qualitative and quantitative changes in various aspects of human life. Economic Development is the process focusing on both qualitative and quantitative growth of the economy. Economic Growth versus Economic Development. 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 growth without development is not important. Economic Growth can be measured through an increase in the GDP, per capita income, etc. ALL RIGHTS RESERVED. The economic growth represents increase in the production of goods and services of a country. The Informal economy is unrecorded economic activity. Economic growth does not consider the Income from the Informal Economy. As opposed to economic development is a continuous process so that it can be seen in the long run. The growth is usually expressed using the Gross Domestic Product GDP. ADVERTISEMENTS: Economic Growth: (1) Single dimensional i.e., increase in output alone. Economic Development vs. Growth. Economic growth is a much narrower concept when compared to Economic Development. 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. 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 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. Economic growth and economic development are two words which are usually mixed by the people and more often used interchangeably. Economic growth is one of the features of economic development. (4) Discontinuous Change (5) Growth is possible without development (6) Determinant of economic growth may be economic development. 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. Improvement in life expectancy rate, infant, literacy rate, poverty rates, and mortality rate. Economic Growth is a narrower concept than economic development. GDP is a measure of the national income / national output and national expenditure. 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. GDP is the market value of final goods & services which is produced in an economy or nation. 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. Economic growth does not consider the Income from the Informal Economy. Economic growth is the subset of economic development. Development economics emerged as a distinct field of study during the post-World War II. 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. ADVERTISEMENTS: The upcoming discussion will update you about the differences between economic growth and economic development. 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. It alludes to a considerable rise in the per-capita national product, over a period, i.e. The rise in the country’s 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 and Development 2. It is concerned with both income and structural changes. When we talk about development, it is usually focused on “economics”. Economic growth is a short-term process which takes into account yearly growth of the economy. We can also have a situation where there is economic growth and economic development, i.e. 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, … The word development and economic development are used interchangeably when you talk about the well-being of a country. For the growth of economically, the government needs to … 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. Economic growth enables an increase in the indicators like GDP, per capita income, etc. 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. Difference Between Economic Growth and Economic Development. it applies in the context of people's sense of morality (right and wrong, good and bad). Economic growth is single dimensional which is concerned with increase in national and per capita income. Unlike economic development, Economic growth is an automatic process. Economic Development is related to Underdeveloped and developing countries of the world. Development alleviates people from low standards of living into proper employment with suitable shelter. an increase in luxury goods and education. However, Economic Development is concerned with Sustainability, which means meeting the needs of the present without compromising. 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. Key Differences. 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. 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. This has a been a guide to the top difference between Economic Growth vs Economic Development. Filed Under: Essays Tagged With: economy. in … In contrast to, economic development applies to developing countries to measure progress. So, economic growth is often a trailing indicator of economic development. 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. 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. HDI (Human Development Index), gender-related index, Human poverty index, infant mortality, literacy rate etc. Improvement in life expectancy rate, infant mortality rate, literacy rate and poverty rates. Economic growth is an automatic process. It indicates an increase in the per capita income of every citizen. They both Economic Growth vs Economic Development have different indicators for their measurement. Depletion of resources such as pollution, congestion & disease. Difference between economic growth and economic development. Difference between Economic Growth and Economic Development. Economic development refers to the process of structural change needed in an economy for economic growth to occur. Your email address will not be published. Unlike economic development, which is the outcome of planned and result-oriented activities. 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. Difference Between Economic Growth and Development 1. Economic Growth: The term economic growth refers to the quantitative aspect of economic progress of a country. Economic growth is necessary but not enough to achieve economic development. 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. 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