Economic Development vs. Growth
What is Difference between Economic Development and Economic Growth? Very often, when talking about the economy of a country or nation is remarkable the large number of people who are confused or do not understand the difference between economic growth and economic development, however, this is no cause for wonder, since both concepts may seem very similar to the naked eye, even though they describe different realities.
Difference between Economic Development and Economic Growth
If you have doubts about this topic or just search for a little more information to expand your knowledge, continue reading, because then we explain why development and economic growth do not mean the same thing. Below this post is actually all about the Difference between Economic Development and Economic Growth.
This concept is somewhat less encompassing than that of economic development. It refers to an increase in the level of a country’s actual national output, which could be caused by an increase in the quality of resources (due to improvements in education …), an increase in the amount of resources and improvements in technology or other ways of adding value to the goods and services produced by each sector of the economy.
Economic growth is measured by taking the Gross Domestic Product (GDP) as an indicator. It is only the percentage increase of GDP in a year. In this sense, it does not take into account the size of the informal economy; also known as “black economy”, in this case also the exploitation of natural resources that could give way to pollution problems and diseases in the future is not considered. Economic growth is a necessary but not sufficient condition for economic development.
On the other hand, this is a normative concept that applies more to the moral sense of people (good-bad). Some theorists define economic development as the increase in the standard of living, improvements in self-esteem, greater freedom and social welfare.
The most accurate way to measure economic development is through the Human Development Index, which takes into account different cups and life expectancies that affect productivity.
This factor favors the creation of more opportunities in the education sector, health care, jobs and preservation of the environment. Economic development implies an increase in the per capita income of each citizen.
Finally, economic development is the most important measure of progress in those countries that are developing; while economic growth is more relevant in developed countries. This last factor brings quantitative changes to the economy, but the first brings about quantitative and qualitative changes.