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WEEK1:
ECONOMIC GROWTH AND DEVELOPMENT
Economic Growth
A country’s general economic health can be measured by looking at that country’s economic growth and development. Let’s take a separate look at what indicators comprise economic growth versus economic development.
Let’s first examine economic growth. A country’s economic growth is usually indicated by an increase in that country’s gross domestic product, or GDP. Generally speaking, gross domestic product is an economic model that reflects the value of a country’s output. In other words, a country’s GDP is the total monetary value of the goods and services produced by that country over a specific period of time.
Economic Development
Now let’s take a look at economic development. A country’s economic development is usually indicated by an increase in citizens’ quality of life. ‘Quality of life’ is often measured using the Human Development Index, which is an economic model that considers intrinsic personal factors not considered in economic growth, such as literacy rates, life expectancy and poverty rates.
While economic growth often leads to economic development, it’s important to note that a country’s GDP doesn’t include intrinsic development factors, such as leisure time, environmental quality or freedom from oppression. Using the Human Development Index, factors like literacy rates and life expectancy generally imply a higher per capita income and therefore indicate economic development.
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Economic Development vs. Economic Growth
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 (gross domestic product).
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