Differences Between Growth and Economic Development
Differences between growth and development
The difference between economic growth and economic development is that development is a much broader concept with more generalized and significant effects, since it implies improvement social aspects and a more equitable society. Economic growth entails a positive change in certain economic indicators such as per capita income that don’t necessarily result from social and institutional development.
Both concepts refer to positive changes in the economy, however, one has a deeper scope than the other.
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Economic growth
Growth is a concept much more focused on the indicators of economic activity and refers to the use of the productive potential of a country that translates into goods and services, uses certain indicators such as per capita income and Gross Domestic Product growth.
In addition, it’s stated that it has a conjunctural nature, for example, growth occurs when there are times of prosperity, such as when the prices of raw materials increase, but once prices decrease, growth stops. Growth is not accompanied by a fair and equitable distribution of national income and the improvement of living standards.
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Economic development
Economic development is the improvement of living standards in general, which includes an improvement of the economy in all its aspects, emphasizing the fair and equitable distribution of what is produced.
Economic development carries the improvement in social and institutional aspects and circular changes, where there is a domino effect and a change in one sector causes changes in others. it’s a self-sustaining improvement, and it’s a more comprehensive concept than that of economic growth.
Economic development results in equal economic, social, and political opportunities for all social classes, those who were marginalized become actors in the development of the nation. In short, economic development, as Sergio de la Peña puts it, not only takes into account material and social advances, but also takes into account the obstacles that arise in the process of social evolution.
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