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Differences between economic growth and economic development

BASIS FOR COMPARISON

ECONOMIC GROWTH

ECONOMIC DEVELOPMENT

Meaning

Economic Growth is the positive change in the real output of the country in a particular span of time.

Economic Development involves rise in the level of production in an economy along with the advancement of technology, improvement in living standards and so on.

Concept

Narrow

Broad

Scope

Increase in the indicators like GDP, per capita income etc.

Improvement in life expectancy rate, infant mortality rate, literacy rate and poverty rates.

Implications

Economic growth refers to an increase over time in a country’s real output of goods and services (GNP) or real output per capita income.

Economic development implies an upward movement of the entire social system in terms of income, savings and investment along with progressive changes in socioeconomic structure of country (institutional and technological changes).

Term

Short term process

Long term process

Applicable to

Developed Economies

Developing Economies

How it can be measured?

Upward movement in national income.

Upward movement in real national income.

Which kind of

changes expected?

are

Quantitative changes

Qualitative and quantitative changes

Type of process

Automatic

Manual

When it arises?

In a certain period of time

Continuous process

Measurement

Quantitative Increases in real GDP

Qualitative

HDI (Human Development Index), gender- related index (GDI), Human poverty index (HPI), infant mortality, literacy rate etc.

Relevance

Economic growth is a more relevant metric for progress in developed countries. But it’s widely used in all countries because growth is a necessary condition for development.

Economic development is more relevant to measure progress and quality of life in developing nations

 

 

Fundamental Differences Between Economic Growth and Economic Development

  1. Economic growth is the positive change in the real output of the country in a particular span of time economy. Economic Development involves a rise in the level of production in an economy along with the advancement of technology, improvement in living standards and so on.

  2. Economic growth is one of the features of economic development.
  3. Economic growth is an automatic process. Unlike economic development, which is the outcome of planned and result-oriented activities.
  4. Economic growth enables an increase in the indicators like GDP, per capita income, etc. On the other hand, economic development enables improvement in the life expectancy rate, infant mortality rate, literacy rate and poverty rates.
  5. Economic growth can be measured when there is a positive change in the national income, whereas economic development can be seen when there is an increase in real national income.
  6. Economic growth is a short-term process which takes into account yearly growth of the economy. But if we talk about economic development it is a long term process.
  7. Economic Growth applies to developed economies to gauge the quality of life, but as it is an essential condition for the development, it applies to developing countries also. In contrast to, economic development applies to developing countries to measure progress.

  8. Economic Growth results in quantitative changes, but economic development brings both quantitative and qualitative changes.

  9. Economic growth can be measured in a particular period. As opposed to economic development is a continuous process so that it can be seen in the long run.

 

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