Difference Between Economic Growth and Economic Development Essay
Economic Growth is a narrower construct than economic development. It is an addition in a country’s existent degree of national end product which can be caused by an addition in the quality of resources ( by instruction etc. ) . addition in the measure of resources & A ; betterments in engineering or in another manner an addition in the value of goods and services produced by every sector of the economic system. Economic Growth can be measured by an addition in a country’s GDP ( gross domestic merchandise ) . Economic development is a normative construct i. e. it applies in the context of people’s sense of morality ( right and incorrect. good and bad ) . The definition of economic development given by Michael Todaro is an addition in life criterions. betterment in self-esteem demands and freedom from subjugation every bit good as a greater pick.
The most accurate method of mensurating development is the Human Development Index which takes into history the literacy rates & A ; life anticipation which affect productiveness and could take to Economic Growth. It besides leads to the creative activity of more chances in the sectors of instruction. health care. employment and the preservation of the environment. It implies an addition in the per capita income of every citizen. Economic Growth does non take into history the size of the informal economic system.
The informal economic system is besides known as the black economic system which is live economic activity. Development alleviates people from low criterions of life into proper employment with suited shelter. Economic Growth does non take into history the depletion of natural resources which might take to pollution. congestion & A ; disease. Development nevertheless is concerned with sustainability which means run intoing the demands of the present without compromising future demands. These environmental effects are going more of a job for Governments now that the force per unit area has increased on them due to Global heating. Economic growing is a necessary but non sufficient status of economic development.