Economic Development and Growth
Economic Development And Growth
Meaning of Economic Development and Growth.
Indicators and Significance of Economic Development.
Indicators and Factors of Economic Growth.
Differences between Economic Development and
Growth.
Economic Development
Meaning:
Economic development is a process whereby an
economy’s real income of national as well as per capita
income of over a long period of time.
Economic development also referred to as the
quantitative and qualitative.
Economic development changes the supply
resources , skills and efficiency , literacy ratio , structure of
demand for goods , consumption habits , living standard ,
level and pattern of income etc.
Definitions
:
Prof . Meier and Baldwin.
“Economic development is a process
where an economy real national income increases
over a long period of time.”
Simple Definition.
“It refers to the process where by the
total supply of goods and services of the society
increases leading towards improved living standard.”
Indicators of Economic
Development
Real National Income.
There are the two types of real national
income and they are nominal and real. Nominal
means the actual national income for the period of
time which measured in numbers. Real means the
purchasing power or how much goods and services
can we brought from the national income.
Increases in Welfare of the People.
Economic wants of the people are satisfied easily
they get better facilities of Education , Health ,
Transport , Better standard of living etc .
Technical Changes
.
Economic development indicates
more output of all sector and more welfare of economy
by which it increase the national income.
Efficient use of Natural Resources
.
Economic development refers to the
process where people utilise the resources . Example
...country like Afghanistan , Bhutan are not very well
developed even though they have enough natural
resources.
Development Agriculture.
High agriculture productivity and
developed agriculture makes the country self-sufficient
in food grains , cash crops etc it means we are more
economic developed.
Increase in Government Revenue.
Economic development increase the
level of national output and per capita income so tax
paying capacity of people increase and the government
can collect larger revenue by way of taxes.
Social Security.
If the government is looking after old
handicapped person and also the unemployed and poor
then such social security measures adopted by the
government
.
Economic Growth
Meaning:
Economic growth is an increase in the
production of goods and services in an economy.
Economic growth is commonly
measured in terms of the increase in aggregate
market value of additional goods and services
produced using GDP. Increase in capital goods ,
labour force , technology and human capital can all
contribute to economic growth.
Definitions:
Michael P. Todaro:
“Economic growth is steady process by which the
productivity capacity of the economy is increased over time
to bring rising levels of national output and income.”
Simon Kuznets:
“Economic growth may be defined as a long term
process where the sustainable and sustain rise in real
national income , total population and real per capita
income takes place.”
Per Capita Income = National Income/ Population
Indicators of Economic Growth
o
Significance of Industrial Sector:
Industrial sector capacities to utilise all
resources of production to maximise national income
and to provide employment for the jobless people.
These countries receive the major portion of their
national income from the non-agriculture sectors
which include industry , trade , transport ,
communication.
o
High Rate Capital Formation:
Grown countries are generally
very rich as they maintain a high level of
savings and investment with the result that
they have huge amount of capital stocks. The
rate of investment constitutes 20 to 25% of
the total national income. The rate of capital
formation in these countries is also very high.
o
Poverty:
The subcategory covers income
distribution and poverty. Poverty is measured
nationally and separately as a percentage of
rural percentage and urban populations.
o
High Production Techniques and Skills:
High production and skills
have become an essential part of economic
growth process in the developed countries. The
new techniques have been used for the
exploitation of the physical human resources.
High production techniques and latest skills
that the countries like Japan , Germany and
Israel could have developed their economics
very rapidly though they have limited natural
resources.
o
Low Growth of Population:
The developed countries
like the USA , the UK and other western
European countries have low growth of
population because they have low level of
birth rate followed by low level of death rate.
Good health condition high degree of
education and high level of consumption of
the people have led to maintain low growth of
population followed by low level of birth and
death rates.
Factors of Economic Growth
1.Economic Factors:
a. Natural Resources:
In fact natural resources are a
necessary condition for economic growth but not a
sufficient one. Among the natural resources the land
area and the quality of the soil , forest wealth , good
river system , minerals and oil resources , climate etc.
b. Capital Formation:
Capital formation is cumulative and
self feeding and includes three interrelated stages –
the existence of real savings and rise in them , the
existence of credit and financial institutions , to use
these savings for investment in capital goods.
c. Technological Progress:
The technological changes are
most essential in the process of economic
growth.
d. Human Resources:
A good quality of population is
very important in determining the rate of
economic progress. Economic growth
investment in human capital in the form of
educational and medical and such other social
schemes is very much desirable.
e. Social Overheads:
Economic growth is the provision
social 0verheads like schools , colleges ,
technical institutions , hospitals and public
health facilities.
f. Transformation of Traditional Agriculture:
Population changes from the primary
sector to the secondary sector and then to the
tertiary sector. Agriculture is the main
occupation of the 70-80% population.
2. Non – Economic Factor:
a. Political Factor:
Political stability and
strong administration are essential and helpful
in modern economic growth. The countries like
the UK , USA ,Germany etc have reached the
level of highest economic growth in the world.
b. Social and Psychological Factors:
Social factors include
social attitudes , social values and social
institutions which changes with the expansion
of education and transformation of culture from
one two another society.
c. Education:
Education is main vehicle of
development. Greater progress has been
achieved in those countries where education is
wide spread.
d. Urbanisation:
Another none economics factor
promoting development is the process of
urbanisation. The structural change in the size
of population in rural and urban sectors.
Difference Between
Economic Development
Economic Growth
The basic feature of economic
development is to rise income
level and improve human
being.
Economic development is the
main issue under modern
economics.
According to various
economists economic
development refers to the
qualitative approach.
The term economic growth is
only concerned with raising
income level and volume of
production.
Economic growth is the key
issue under traditional
economics.
According to various
economists economic growth
is said to be quantitative
approach.
•
The concept of economic
development is more important
because it discusses an economy
in wider sense.
•
The concept of economics
development is incomplete
without political stability.
•
Economic development is a long
term process about 20 to 25 years.
•
The concept of economics
growth is less important due to
the attachment with income level
only.
•
The concept of economic growth
is not concerned with the political
stability.
•
Economic growth is a short term
process about one year.
THANK YOU
Economic development and growth are essential factors in measuring a nation's progress over time. Economic development involves changes in resources, skills, efficiency, literacy, and living standards, ultimately increasing the supply of goods and services. On the other hand, economic growth pertains to the increase in real national income, leading to improved living standards. Indicators include real national income, welfare enhancement, technical changes, efficient resource utilization, increased government revenue, and social security measures.
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Presentation Transcript
Meaning of Economic Development and Growth. Indicators and Significance of Economic Development. Indicators and Factors of Economic Growth. Differences between Economic Development and Growth.
Economic Development Meaning: economy s real income of national as well as per capita income of over a long period of time. Economic development also referred to as the quantitative and qualitative. Economic development changes the supply resources , skills and efficiency , literacy ratio , structure of demand for goods , consumption habits , living standard , level and pattern of income etc. Economic development is a process whereby an
Definitions: Prof . Meier and Baldwin. where an economy real national income increases over a long period of time. Simple Definition. It refers to the process where by the total supply of goods and services of the society increases leading towards improved living standard. Economic development is a process
Indicators of Economic Development Real National Income. There are the two types of real national income and they are nominal and real. Nominal means the actual national income for the period of time which measured in numbers. Real means the purchasing power or how much goods and services can we brought from the national income. Increases in Welfare of the People. Economic wants of the people are satisfied easily they get better facilities of Education , Health , Transport , Better standard of living etc .
Technical Changes. more output of all sector and more welfare of economy by which it increase the national income. Efficient use of Natural Resources. Economic development refers to the process where people utilise the resources . Example ...country like Afghanistan , Bhutan are not very well developed even though they have enough natural resources. Development Agriculture. High agriculture productivity and developed agriculture makes the country self-sufficient in food grains , cash crops etc it means we are more economic developed. Economic development indicates
Increase in Government Revenue. Economic development increase the level of national output and per capita income so tax paying capacity of people increase and the government can collect larger revenue by way of taxes. Social Security. If the government is looking after old handicapped person and also the unemployed and poor then such social security measures adopted by the government.
Economic Growth Meaning: production of goods and services in an economy. Economic growth is commonly measured in terms of the increase in aggregate market value of additional goods and services produced using GDP. Increase in capital goods , labour force , technology and human capital can all contribute to economic growth. Economic growth is an increase in the
Definitions: Michael P. Todaro: Economic growth is steady process by which the productivity capacity of the economy is increased over time to bring rising levels of national output and income. Simon Kuznets: Economic growth may be defined as a long term process where the sustainable and sustain rise in real national income , total population and real per capita income takes place. Per Capita Income = National Income/ Population
Indicators of Economic Growth o Significance of Industrial Sector: Industrial sector capacities to utilise all resources of production to maximise national income and to provide employment for the jobless people. These countries receive the major portion of their national income from the non-agriculture sectors which include industry , trade , transport , communication.
o High Rate Capital Formation: Grown countries are generally very rich as they maintain a high level of savings and investment with the result that they have huge amount of capital stocks. The rate of investment constitutes 20 to 25% of the total national income. The rate of capital formation in these countries is also very high. o Poverty: The subcategory covers income distribution and poverty. Poverty is measured nationally and separately as a percentage of rural percentage and urban populations.
o High Production Techniques and Skills: have become an essential part of economic growth process in the developed countries. The new techniques have been used for the exploitation of the physical human resources. High production techniques and latest skills that the countries like Japan , Germany and Israel could have developed their economics very rapidly though they have limited natural resources. High production and skills
o Low Growth of Population: like the USA , the UK and other western European countries have low growth of population because they have low level of birth rate followed by low level of death rate. Good health condition high degree of education and high level of consumption of the people have led to maintain low growth of population followed by low level of birth and death rates. The developed countries
Factors of Economic Growth 1.Economic Factors: a. Natural Resources: In fact natural resources are a necessary condition for economic growth but not a sufficient one. Among the natural resources the land area and the quality of the soil , forest wealth , good river system , minerals and oil resources , climate etc. b. Capital Formation: Capital formation is cumulative and self feeding and includes three interrelated stages the existence of real savings and rise in them , the existence of credit and financial institutions , to use these savings for investment in capital goods.
c. Technological Progress: most essential in the process of economic growth. d. Human Resources: A good quality of population is very important in determining the rate of economic progress. Economic growth investment in human capital in the form of educational and medical and such other social schemes is very much desirable. The technological changes are
e. Social Overheads: social 0verheads like schools , colleges , technical institutions , hospitals and public health facilities. f. Transformation of Traditional Agriculture: Population changes from the primary sector to the secondary sector and then to the tertiary sector. Agriculture is the main occupation of the 70-80% population. Economic growth is the provision
2. Non Economic Factor: a. Political Factor: strong administration are essential and helpful in modern economic growth. The countries like the UK , USA ,Germany etc have reached the level of highest economic growth in the world. b. Social and Psychological Factors: Social factors include social attitudes , social values and social institutions which changes with the expansion of education and transformation of culture from one two another society. Political stability and
c. Education: development. Greater progress has been achieved in those countries where education is wide spread. d. Urbanisation: Another none economics factor promoting development is the process of urbanisation. The structural change in the size of population in rural and urban sectors. Education is main vehicle of
Difference Between Economic Development Economic Growth The basic feature of economic development is to rise income level and improve human being. Economic development is the main issue under modern economics. According to various economists economic development refers to the qualitative approach. The term economic growth is only concerned with raising income level and volume of production. Economic growth is the key issue under traditional economics. According to various economists economic growth is said to be quantitative approach.
The concept of economic development is more important because it discusses an economy in wider sense. growth is less important due to the attachment with income level only. The concept of economic growth is not concerned with the political stability. The concept of economics development is incomplete without political stability. Economic growth is a short term process about one year. Economic development is a long term process about 20 to 25 years. The concept of economics
