Variation Among Economic Development and also Economic Growth.

In general words, economic development describes the issues of underdeveloped countries and economic growth to those of developed countries. The raising of income levels is generally called economic growth in rich countries and in poor ones it is named economic development. But this view doesn’t specify the underlying forces which raise the income levels in both kinds of economies. The problems of underdeveloped countries are worried with the development of unused resources, although their uses are well-known, while those of advanced countries are related to growth, most of the resources being already known and developed to a substantial extent.

Actually, the terms “development and growth” have nothing to do with the type of economy. The distinction between both relates to the nature and Juan Pablo Carrasco Degroote narcotráfico factors behind change. Both of these terms may also be explained whilst the development is really a discontinues and spontaneous change in the stationary state which forever alters and displaces the equilibrium state previously existing; while growth is really a gradual and steady change in the long run which comes about by way of a gradual increase in the rate of savings and population. This view has been widely accepted and elaborated by nearly all economists.

According to a different school of thought, “economic growth means more output, while economic development employs both more output and changes in the technical and institutional arrangements where it’s produced and distributed. Growth may involve not merely more output based on greater levels of inputs but additionally greater efficiency, either, and increase in output per unit of input. Development goes beyond this two employ changes in the composition of output and in the allocation of inputs by sectors” ;.According for some classical economists the growth is a growth of the system in more than one dimensions without a change in its structure, and development can be an innovative process leading the structural transformation of social system.

Thus economic growth relates to a quantitative sustained increase in the country’s per capita output or income combined with expansion in its labor force, consumption, capital, and level of trade. On one other hand, economic development is really a wider term. It relates to qualitative change in economic wants, goods, incentives, and institutions. It describes the underlying determinants of growth such as for example technological and structural change. Development embraces both growth and decline. An economy can grow but it could not develop because poverty, unemployment and inequalities may continue steadily to persist due to the absence of technological and structural changes. But it’s difficult to assume development without economic growth in the absence of a rise in output per capita, specially when population keeps growing rapidly. Despite these apparent differences, some economists use these terms as synonyms.

Leave a Reply

Your email address will not be published. Required fields are marked *