For example, the proportion of primary goods in exports declines and that of capital goods rises and on the other hand, the proportion of consumer goods in imports falls and that of industrial raw material increases. It is a “constricted” concept. It basically measures the total volume of goods and services produced in an economy. It only takes into account the value of goods and services produced in the economy. Rise in life expectancy rate, infant, improvement in literacy rate, infant mortality rate and poverty rate etc. Economic Growth: The term economic growth refers to the quantitative aspect of economic progress of a country. ADVERTISEMENTS: (3) Spontaneous in character. Economic growth means the growth in the productive capacity of an economy or in other words, it conveys growth in the production of goods and services in an economy. Arthur Lewis in his The Theory of Economic Growth writes that “Most often we shall refer only to growth but occasionally for the sake of variety, to progress or to development. Growth in economic terms corresponds to the increase in GDP (national income). The process takes a long period of time as compared to economic development. Conclusion – Economic Growth vs Economic Development After examining the above information, we can say that Economic Growth is a subset of Economic development. Economic Development related to qualitative changes in economy. Thus, when production and fair distribution take place simultaneously over a long period of time, the society develops as a whole, enjoying equally better food, shelter etc. The most comprehensive definition perhaps of economic development is the one given by Todaro: 1 Environmental Kuznets Curve 6 2. Earth cannot support unrestricted growth. The accentuation of the social side of economic development should not be understood as abandonment of economic growth. Growth, Development and Employment: A discussion on growth should begin from the definition of growth. Ahmed Fawzy 900170888 Economic Development Essay Difference Between Economic Development & Economic Growth Economic growth and development from the eye of a non-economics student might seem like they are the same, however there is a difference between them. Economic growth and economic development are two words which are usually mixed by the people and more often used interchangeably. Striking a balance to bring these entities with extreme views on a common platform is the need of time. CFAÂ® And Chartered Financial AnalystÂ® Are Registered Trademarks Owned By CFA Institute.Return to top, IB Excel Templates, Accounting, Valuation, Financial Modeling, Video Tutorials, * Please provide your correct email id. Unlike economic development, Economic growth is an automatic process. Economic growth may increase the weight of a nation in world affairs, but it may fail to make life any easier for its inhabitants. The terms Economic Growth and Economic Development sound very similar. This is an essential pre-requisite for economic growth to take place. The process of growth is initiated when saving rate of a country as a proportion of national income increases and as a consequence, investment level goes up; and thereby real national income or real GNP of the country increases. 2 Alternative views on … Economic development vs. growth. For example, relative contribution of primary sector in the real GNP declines while that of secondary and tertiary sectors goes up. … It is quantitative in nature. There may be economic growth without development, but the inverse relationship is not valid. It is an automatic process so may not require government support/aid or intervention, Highly dependent on government intervention as it includes widespread policies changes so without government intervention it is not possible. From such simple definitions we find that economic development is a qualitative term while economic growth is a quantitative term. While Seers relegates economic growth to a secondary signal of development potential, providing more an indication of what a nations may be able to achieve on the other primary … Short-term increase in national and per capita income may take place as a result of cyclical boom which may be followed by a phase of depression Hence short-term fluctuation in an economy will negate the existence of economic growth. Investment patterns of the world also changes top differences between economic growth is GDP per income! The growth of human capital … economic development is a gradual and steady change in the UK economic it... 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