Economic Growth And Development

In general, the terms “Growth” and “Development” are often used interchangeably, since they express the same idea which is “Advancement”. However, there are some differences between them. The term “Growth” actually means an increase in something that you can quantify. For instance, a tree can grow and that means that it adds to its height and we can measure the inches it has grown. In terms of economics, growth is an increase in the country’s capacity to produce the output of goods and services within the country, which can be caused by larger stock of productive capital, larger size of supporting services such as transport and banking, and an increase in the efficiency of productive capital and services. Economic growth is indicated by a

In theory, each of these approaches should lead to the same result. GDP is sometimes considered as a piece of cake and the growth is an increase in the size of the cake. The larger the size of the cake, the more people can enjoy. This implies that it is necessary to produce more goods and services, so more people can benefit from it. Nevertheless, economic growth literally refers to an economy that is getting bigger, not necessarily one that is getting better. Although the cake is getting larger, the size of each slide that each person gets in not equal. This illustrates that though the a country can produce more goods and services over a specific of time, each person benefits from the growing economy unequally and the capabilities and opportunities of each individual is not same. That is why we have to look at something that is not representing only the size of growth but also its

It gives broader aspects to the term growth, as it encompasses many things but it is shown by the qualitative improvement of circumstances. For example, when a tree develops, it will not only grow, but also be able to reproduce, bear fruit, be healthy and continue growing. The same concept can be applied to development, according to Michael Todaro, economic development is an increase in living standards, improvement in self-esteem needs and freedom from oppression as well as a greater choice. Since it takes years to change social, economics, as well as institutional set-up, economic development is a long-term process, which takes about 20 to 25 years, unlike economic growth that could be measured annually. There are a number of different human development indicators which are human poverty index for developing countries (HPI 1), human poverty index for selected OECD countries (HPI 2), gender-related development index (GDI), and gender-empowerment measure (GEM). But, the most well known measure of economic development is human development index (HDI) which is published on a regular basis by The United Nations Development Programme (UNDP) in its Human Development Report. The HDI