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- Difference between economic growth and development
- Difference Between Economic Growth and Economic Development (With Table)
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Development economics considers factors such as health, education, working conditions, domestic and international policies, and market conditions with a focus on improving conditions in the world's poorest countries. The field also examines both macroeconomic and microeconomic factors relating to the structure of developing economies and domestic and international economic growth.
Development economics studies the transformation of emerging nations into more prosperous nations. Not only that, but the cultural and economic frameworks of every nation is different also, such as women's rights and child labor laws. They also include international trade, globalization , sustainable development, the effects of epidemics, such as HIV, and the impact of catastrophes on economic and human development. Mercantilism is thought to be one of the earliest forms of development economics that created practices to promote the success of a nation.
It was a dominant economic theory practiced in Europe from the 16th to the 18th centuries. It believed the higher the supply of gold and silver, the more wealthy it would be. In general, it sought a trade surplus exports greater than imports , did not allow the use of foreign ships for trade, and it optimized the use of domestic resources. Economic nationalists do not generally agree with the benefits of globalization and unlimited free trade.
They focus on a policy that is isolationist so that the industries within a nation are able to grow without the threat of competition from established companies in other countries. The economy of the early United States is a prime example of economic nationalism. As a new nation, it sought to develop itself without relying so much on outside influences. It enacted measures, such as high tariffs, so its own industries would grow unimpeded.
The linear stages of growth model portrays an appropriately designed addition of capital partnered with public intervention. This injection of capital and restrictions from the public sector leads to economic development and industrialization. The structural-change theory focuses on changing the overall economic structure of a nation, which aims to shift society from being a primarily agrarian one to a primarily industrial one.
For example, Russia before the communist revolution was an agrarian society. When the communists overthrew the royal family and took power, they rapidly industrialized the nation, allowing it to eventually become a superpower.
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Your Practice. Popular Courses. Economics Macroeconomics. What Is Development Economics? Key Takeaways Development economics is a branch of economics whose goal is to better the fiscal, economic, and social conditions of developing countries. Areas that development economics focuses on include health, education, working conditions, and market conditions.
Development economics seeks to understand and shape macro and microeconomic policies in order to lift poor countries out of poverty.
The application of development economics is complex and varied as the cultural, social, and economic frameworks of every nation is different. Four common theories of development economics include mercantilism, nationalism, the linear stages of growth model, and structural-change theory.
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Difference between economic growth and development
We have started our discussion of development by addressing very broad issues relating to the concept of development. However, much of the literature and thinking about 'development' focuses on economics. Indeed 'development' and 'economic development' have often been treated as synonymous concepts. The economic development of a country or society is usually associated with amongst other things rising incomes and related increases in consumption , savings, and investment. Of course, there is far more to economic development than income growth; for if income distribution is highly skewed, growth may not be accompanied by much progress towards the goals that are usually associated with economic development. What characteristics are typically associated with economic development?
Economics is the study of how individuals, governments, businesses, organizations, as well as countries use their limited resources effectively and efficiently to benefit from it to the maximum extent. It deals with manufacturization, distribution, and consumption of goods and services. Economics addresses the questions such as what to produce, how to produce, and who will produce it. It is an important factor as it denotes the distribution of resources, social efficiency, consumer behavior, market failure, economic forecasts, opportunity costs, along with decisions. The difference between Economic Growth and Economic Development is that economic growth expresses the growth in the real national income, whereas, on the other hand, economic development expresses the improvement in the living standards of the population of the respective country. Economic growth is the increase in the goods and services produced per person over some time, whereas, economic development is the increase in output along with improvement in the social, as well as the political welfare of the population within a nation. Economic growth measures the real national income i.
Difference Between Economic Growth and Economic Development (With Table)
Economic Growth refers to the rise in the value of everything produced in the economy. It alludes to considerable rise in per-capita national product, over a period, i. Economic Growth is often contrasted with Economic Development , which is defined as the increase in the economic wealth of a country or a particular area, for the welfare of its residents. Here, you should know that economic growth is an essential but not the only condition for economic development. The economic trend in a country as a whole, is the major component for its business environment.
The term economic growth refers to the quantitative aspect of economic progress of a country. We know human wants are unlimited and they are increasing over time. Man is never satisfied with what he has. However, our resources are very limited.
Before addressing the question of what are the stages of economic development, it is useful to focus first on the main difference between economic growth and economic development. Obviously, sustained economic growth typically implies economic development, but most development economists nevertheless use the two terms differently. Economic growth typically refers to an increase in gross domestic product GDP , while economic development typically refers to a structural transformation, mostly of the economy.