The GDP or GDP per capita actually helps to identify the market size of the respective sectors. Artige and Nicolini (2005) at least think so regarding market size. In the econometric study, the GDP per capital act the core determinants of the FDI. On the other hand, Jordaan (2004) thinks that, FDI flows becomes smooth where there are possibilities of expanding the market, the purchasing power of the people is relatively high, and return on investment is also high. These factors determine the flows of FDI in the country for the economic benefits of the country.
It is the human capital investment, knowledge and innovation that contribute significantly to the economic growth. The theory also gives a focus to the spillover effects and the positive externalities from the knowledge-based economy that leads to economic development. It is from these perspectives that this theory holds policy measures as the key determinants of economic growth. For instance, subsidies to research institutions or the provision of education may lead to an increased endogenous growth as a result of the increased incentive for innovation. On the other hand, exogenous growth theorists gave their support to that economic growth highly depends on either the rate of savings or the technical progress rate (Solow model).
Productivity is a variable that permits a nation to maintain high wages, a strong money, and handsome return to investment and with all of them a high level standard of living. Global economy is not a zero-sum game and various countries can expand their richness if they can start improving productivity [World Economic Forum (2005)]. Competitiveness defined as: A set of factors, institutions and policies which establish the level of productivity of a nation and therefore, manage the level of prosperity that can be assessing by an economy [World Economic Forum (2005)]. Productivity is a main driver of the rates of return on investment, which in turn reflects the level of aggregate growth rate of the economy. So, a more competitive economy is the one that is expected to grow more rapidly over the way to long term.
Business are what determines whether the business is making profit or not which later contributes to economic growth of a country. By all of that one can understand economic studies as allocation of scarce resources to satisfy unlimited wants. 2. Economic growth and Business cycles 2.1 Economic growth Traditionally defined, economic growth is the annual rate of increase in total production or income in the economy (Mohr et al., 2015:410). Usually economic growth is considered a good thing for the economy.
Skill development ensures enhancement in labour force participation, quality of labour and productivity of labour leading to overall growth of economy. Thus, it can be considered as a key growth engine that drives economy forward. The growing demand for skills and entrepreneurship can be understood by various factors influencing employment of an economy and evaluate. Age structure of population, skill set of labour force and structure of economy constitute few of the many factors(Vision 2020, Gupta). Age Structure of Population: Andhra Pradesh has a Skillset of Labour
Human Development has been recently considered as the ultimate goal of human activity instead of economic development. We can define Human Development as expanding people 's opportunities and Choices to reach a point in which they can live longer, healthier, more educated and fuller lives. Apparently, there is a substantial relation between economic growth (EG) and human development (HD). From one way, economic growth gives the resources to allow perpetual progress in human development. On the other way, improvements in the quality of the labour force (Education, Health) are an essential factors contributing to economic growth.
Quantitative. Increases in real GDP. Effect Brings qualitative and quantitative changes in the economy Brings quantitative changes in the economy Relevance Economic development is more relevant to measure progress and quality of life in developing nations. Economic growth is a more relevant metric for progress in developed countries. But it's widely used in all countries because growth is a necessary condition for
Alan Dearoff professor of economics and public policy, university of Michigan defined economies development as “sustained increased in the economic standard of living of a country’s population, normally accomplished by increasing its stock of physical and human capital and improving its technology”. Comel article explained that economic development is measured in terms of jobs and income, but it also includes improvements in human development, education, health and environmental sustainability. For economic development to occur there must be sustained quantitative and qualitative improvements in almost all the sectors of the economy (Litman, 2010). Many people use economic growth and economic development interchangeably, however, there is difference
Explanation: Eager buyers crowding checkout lanes, cranes erecting buildings or help-wanted signs filling store windows-all are signs of economic growth, which largely affects the material well-being of a country. When the economy expands, jobs are created and goods and services to meet people’s needs increase. For these reasons, economists are interested in the causes of growth and what countries can do to maintain or enhance it. Throughout history, some economies have expanded faster than others. Some differences can be traced to such inherent factors as climate and geography.
Reflections on Economic Perspective of Development I would prefer a combination of Development Theory 1: Explaining Growth and Development Theory 2: Structural Transformation. The “neoclassical growth model” by Robert Solow emphasizes that equipping the human resources and physical equipment through technological improvement with more capital can lead to higher productivity. The growth model stresses that a better transport system, new navigation, and technological breakthroughs can lead to a greater productivity. Under the Growth Theories, production is function of land and natural resources, physical equipment, labor and skills and technology. These are the determinants of the growth of production.