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economic growth is a quantitative concept discuss

economic growth is a quantitative concept discuss

Image Guidelines 5. Determinants of Economic Growth. On the whole, in this view of economic development which generally prevailed till seventies, development was considered to be an economic phenomenon in which benefits from growth in overall GNP or per capita GNP and the structural changes accompa­nying it would trickle down to the poor and unemployed. Content Filtrations 6. The first point is widely accepted, but its implications are … They argue that total national income may be increasing and yet the standard of living of the people may be falling. If all three of these have declined from high levels, then beyond doubt this has been a period of development for the country concerned. Disclaimer 9. Economic growth is an important macro-economic objective because it enables increased living standards, improved tax revenues and helps to create new jobs. For the sake of comparison we have given in Table 39.1 the data of population, Gross National Income (GNI) per capita and growth rate of Gross Domestic Product (GDP) for three periods 1980-90, 1990-2000 and 2000-2009 of some both developed and developing countries. A country's general economic health can be measured by looking at that country's economic growth and development. It is a quantitative measure that shows the increase in the number of commercial transactions in an economy. Table 39.1. According to Paul Baron, “Economic growth may be defined as an increase over time in per capita output of material goods.” In other words, growth of gross national output or per capita output is an indicator of economic growth. Economic development, the process whereby simple, low-income national economies are transformed into modern industrial economies.Although the term is sometimes used as a synonym for economic growth, generally it is employed to describe a change in a country’s economy involving qualitative as well as quantitative improvements.The theory of economic … In agriculture, Birdsall (1993) … Economic development refers to the process by which the overall health, well-being, and academic level of the general population of a nation improve. Economic Growth is defined as the rise in the money value of goods and services produced by all the sectors of the economy per head during a particular period. Thus World Development Report 1991, published by World Bank asserts: “the challenge of develop­ment is to improve the quality of life, especially in the world’s poor countries, a better quality of life generally calls for higher incomes but it involves much more. Economic growth can be measured in ‘nominal’ or ‘real’ terms. ECONOMIC GROWTH VS. ECONOMIC DEVELOPMENT 12. For a recent classification identifying the non-Communist developed countries see United Nations, Yearbook of National Accounts Statistics, … Per capita income will rise when the national income increases faster than population. This article helps students gain a broader understanding of the concepts of Economic Growth and Economic Development and the difference between them. Structural change refers to changes in technological and institutional factors which cause shift of labour from agriculture to modern manufacturing and services sectors and also generate self-sustaining growth of output. According to Leszek Balcerowicz, economic growth is a process of quantitative, qualitative and The recent estimates of annual growth in per capita income and GNP are given in Table 39.1. Economic growth is the subset of economic development. As a … Economic growth has been defined in two ways. ...ST.PAUL’S UNIVERSITY DEPARTMENT OF SOCIAL SCIENCES COURSE: BCD 111: INTRODUCTION TO DEVELOPMENT CONCEPTS TASK: Discuss the Rostowian Stages of Economic Development and Critic the theory. The problem of the developing countries is to catch up with the developed countries through attaining rapid economic growth so as to enjoy higher levels of living. Thus United Nations ‘Human Development Report’ of 1994 in the writing of which Prof. Amartya Sen made a significant contribution, asserts, “Human beings are born with certain potential capabilities. To be most accurate, the measurement must remove the effects of inflation. Robert Solow developed the neo-classical theory of economic growth and Solow won the Nobel Prize in Economics in 1987. These include Benefits of economic growth Increased consumption. Also Check: Human Capital on Economic Growth. The overall development of a country is based on many parameters such as the creation of job opportunities, technological advancements, standard of living, living conditions, per capita income, quality of life, improvement in self-esteem needs, GDP, industrial and infrastructural development, etc. Content Guidelines 2. ECONOMIC GROWTH … Economic Development is a broader concept than the Economic Growth. See the answer. The economic growth is also the process that allows the receding of phenomena with a negative economic and social impact, like unemployment or inflation. Minhas estimated that 37 per cent of rural population in India lived below the poverty line in 1967-68. The terms Economic Growth and Economic Development sound very similar. No separate or special attention was paid to eliminate mass poverty and unemployment and to reduce inequalities in income distribution. Education, for instance, has a strong effect on labour productivity. The Concept of Economic Development: The Modern View: The experience of the developing countries during the sixties and seventies showed that whereas target rates of economic growth were in fact achieved trickle-down effect in the form of creation of more employment opportunities, rise in wages and improvement in income distribution did not operate. This led to the view that economic development should not be judged on the basis of growth in GNP alone. Another point which is worth mentioning in regard to the definition of economic growth is that the increase in national income or more correctly increase in per capita income or output, must be a ‘sustained increase’ if it is to be called economic growth. For instance, in India Dandekar and Rath found that 40 per cent of rural population in India lived below the poverty line in 1968-69. That is, during the process of economic development percentage share of working population in agriculture sharply falls whereas percentage shares of working population employed in modern industrial and services sectors substantially increase. Therefore, when we regard the well-being of the masses as the ultimate objective of development, we have to see whether poverty and unemployment are decreasing and how the increases in gross national product or national income are being distributed among the population. Living standards vary widely from country to country, and … Show transcribed image text. This human development index is considered as a better indicator of economic development index. TOS 7. From such simple definitions we find that economic development is a qualitative term while economic growth is a quantitative term. What has been happening to inequality? What has been happening to unemployment? As a result, per capita income and levels of living of the people of the developed countries are now much higher as compared to those of the developing countries. 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Economic growth refers to an increase in the size of a country's economy over a period of time. The main thesis is that the common practice of basing the definition of growth on an omnibus and pseudo-quantitative concept of aggre- gate economic welfare is not only untenable but is also unnecessary. Development has to be more concerned with enhancing the life we lead and the freedoms we enjoy.”. If one or two of these central problems have been growing worse, especially if all three have, it would be strange to call the result development even if per capita income doubled.”. In other words, economic growth is an expansion of the economic output of a country. Econometrics is the application of statistical methods to economic data in order to give empirical content to economic relationships. In India also our Planning and levels of living of the developed and the developing countries. ADM NO: BACD/NRB/2631/13 LECTURER: GERALD KWERI DATE: 10TH JUNE 2012 Rostow’s theory of economic growth … It can be measured in nominal or real (adjusted for inflation) terms. economic development, as used by most corporate economists and politicians, corresponds to the narrow quantitative concept of economic growth, while the biological and ecological sense of development corresponds to the notion of qualitative growth. While Economic growth is a quantitative concept, Economic development is a qualitative concept. However, since the seventies it has been thought necessary to distinguish between economic growth and economic development. The argument proceeds in terms of the warranted and natural rates of growth, the most fundamental concepts of growth economics originally due to Harrod (1948). Thus C.P. Inflation is the decline of purchasing power of a given currency over time. 1. Economic growth is an increase in the production of economic goods and services, compared from one period of time to another. It will be seen from this Table 39.1 that in the last two decades India has become the second fastest growing economy of the world. Long-term growth. More precisely, it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference". prominent in discussions of the concept of economic growth. True enough, the concept of economic development is broader than economic growth. Harrod defined the warranted rate of growth as “that over-all rate of advance which, if executed, will leave entrepreneurs in a state of mind in which they are prepared … By sustained increase in per capita income we mean the upward or rising trend in per capita income over a long period of time. The traditional view has been to interpret it in terms of planned changes in the structure of national product and the occupational pattern of labour force and also the institutional and technological changes that bring about such changes or accompany such changes. 1. It may be noted that Kuznets in his study of Modern Economic Growth interpreted the process of modern economic growth which involves these structural changes. Growth and the Environment: The Sustainability of Economic Growth. It also means improved production volume due to the advancements of technology. Firstly, higher GDP implies the economy is producing … On the basis of various ingredients of good quality of life and other criteria such as enlargement of human choices and freedom a human development index is prepared by United Nations Devel­opment Programme (UNDP). Economic growth is quantitative variable, while economic development is quantitative and qualitative one. According to the modern perception of economic development, rapid increase in GNP secured through displacing labour by machines and thus causing rise in unemployment and under-employment cannot be called true economic development. The problems of poverty, unemployment and income inequality further worsened instead of getting reduced during the process of growth in the Fifties and Sixties in the developing countries. Economic growth can be referred to as that increase which is witnessed in the monetary value of all the goods and services that are produced in the economy during a time period. Economic devel­opment will take place in true terms only if the poor people are raised above the poverty line. For a discussion of the economic epoch concept see Simon Kuznets, Modern Economic Growth: Rate, Structure, and Spread, Yale University Press, New Haven, Conn., 1966, pp. Wealth is important for human life, but to concentrate on it exclusively is wrong for two reasons. But, obviously, a durable economic growth sustains human development. Economic growth is a much narrower concept when compared to Economic Development. In fact, the biological concept of development includes both … Required fields are marked *, Difference Between Economic Growth And Economic Development, Increase in the monetary growth of a nation in a particular period, It refers to the overall development of the quality of life in a nation which includes economic growth, It is a narrower concept than Economic Development, It is a broader concept than Economic Growth, It is a uni-dimensional approach which deals with the economic growth of the nation, It is a multi-dimensional approach that looks into the income and as well as the quality of life of the nation, It is an automatic process that may or may not require intervention from the government, It requires intervention from the government as all the developmental policies are formed by the government, Quantitative as well as qualitative changes, HDI, Per capita Income, Industrial Development. Economic growth can be measured in terms of the increase in the aggregate market value of additional goods and services produced, using economic concepts such as GDP and GNP. Professor Dudley Seers makes the meaning of economic development according to the new perception in the following words: “The questions to ask about a country’s development are therefore: What has been happening to poverty? However, the two concepts are different. Economic growth means an increase in real GDP – which means an increase in the value of national output/national expenditure. An aspect of structural change which is of special mention is that during the process of economic development there occurs a shift of working population from low productivity employment in agriculture to the modern industrial and services sectors having higher levels of productivity of labour. 2. The size of an economy is typically measured by the total production of goods and services in the economy, which is called gross domestic product (GDP). economic growth of a nation, human development is bound to have an impact on economic growth. This definition has been criticized by some economists as inadequate and unsatisfactory. This is so because when population is increasing more rapidly than national income, per capita income will go on falling. The purpose of development is to create an environment in which all people can expand their capabilities, and opportunities can be enlarged for both present and future generations……. GDP and GNP are indicators that not only tell the size of an economy, they also tell in numbers and percentage how much an economy has progressed compared to last year. 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