The difference between economic growth and development, focuses on growth that is related to the increase in productivity and income that it has a certain territory and development is based on the measurement of optimization of the conditions presented by a population.
In this sense, the concepts of both growth and economic development are fundamental to be able to carry out the evaluation of the performance of the different countries in relation to the achievement of their social objectives and financial
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Despite this, this relationship may present an inequality, since a State can maximize its production and income, but sometimes this is not reflected in its development indices.
But, when a population improves significantly individually thanks to the maximization of their income, could have a great impact on the economic development of territorial space that occupies.
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In this article you will find:
Differences between economic growth and development
There is a wide variety of differences between growth and economic development that must be taken into account, some of their differences are:
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Indices
One of the differences of these economic concepts is that economic development is directly related to the index of the human poverty, on the other hand, economic growth is related to the income of most components of the domestic product stupid.
Implications
Economic development is defined as the complete increase of the social system that is linked to savings, salary, health, investments and educational level, among others. For the results to appear, it is essential that progressive modifications arise within the socioeconomic structure.
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Instead, economic growth is about the true increase in the productivity of a state.
Relevance
In economic development, it is much more relevant to stimulate the quality of life, through disposition of the different related indicators that help to optimize the living conditions of people. While in economic growth, a way to increase capital and economic income is sought to improve people's quality of life.
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Effects edit
For economic development, there are greater qualitative and quantitative modifications within the economy, while in economic growth changes only exist in the field quantitative.
Scope
Economic development is more focused on long-term economic structural changes. But in the case of economic growth, it does so in increasing economic productivity, which has a short-term focus.
What is economic growth?
Economic growth is the increase in the income of a certain population or country. This income is generated through productivity income or by the increase in prices of goods or services, which is reflected in the gross domestic product.
Economic theory indicates that economic growth has the ability to increase development. Despite this, it has been shown that an inefficient process of income obtained by the State or the absence of financial and social policy, can limit future development.
Its objective is defined as the best quality of life system in the countries, which leads to goals that are fully formed into solid objectives.
Factors influencing economic growth
There are different factors that can influence the economic growth of a nation, some of them are:
- Increased work system: The greater the job opportunity, the greater the productivity.
- Political stability: Increase the confidence of local and foreign investors.
- Capital accumulation: That it be represented through the saving capacity of the population.
- Positive trade balance: Maintain a favorable relationship between what is imported and what is exported.
- Consumption level: While there is more consumption, there will be more growth.
- Technology and innovation: That influence productivity directly.
- Production increase: Product production manages to increase consumption.
- Investment expenses: The money allocated by the State to increase production.
What is economic development?
Economic development is the ability of a territory or country to create wealth that helps promote and maintain the financial and social well-being of the population. Development economics is responsible for studying everything related to development.
It is continually mistakenly associated with a high growth rate that boasts a high level of development. Despite this, in economies that contain models with strongly weak and unstable states at the institutional level, growth rates do not belong to acceptable levels of development.
Its main objective is to focus on providing a high level of well-being in the entire population using macroeconomic variables and revitalization with the local economic environment.
Factors influencing economic development
For a safe and solid economic development to be generated in the future, various quantitative and qualitative factors need to be interrelated, such as the following:
- Social institutions: Formed by the State, laws, social organizations and traditions, among others.
- Legal security: Encourages the purchase of properties that are used for production.
- Corruption Free Laws: By reducing corruption, development opportunities will increase.
- Economic growth: This can be a great influence on the increase in income that corresponds to the population.
- Individual and collective values: They directly influence development by stimulating or limiting it depending on the dominant practices.
- Land production: A strong agricultural sector has an impact on development.
- Infrastructure: Accessibility to transport and communications influences the production and quality of life.
Although the difference between economic growth and development, is directly related have different definitions, therefore, it is necessary to clarify that economic growth follows economic development.
It can happen that a country has an economic recession, while some attempts at economic development can happen in that country. This indicates that economic growth is an indicator that tracks economic development.
