HomeEconomicDifference between economic development and economic growth

Difference between economic development and economic growth

In general, economic development refers to the problems of less developed countries and economic growth for developed countries. Increased income levels are generally called economic growth in rich countries and the poor is called economic development. But this view does not determine the underlying power that raises the income level in two types of economics. The problem of underdeveloped countries is noticed with the development of resources that are not used, despite its famous use, while developed countries are related to growth, most of their resources are known and developed to the majority.

In fact, the term “development and growth” has nothing to do with the type of economy. The difference between the two is related to the nature and causes of change. Both of these terms can also be explained because the development is the termination and spontaneous change in a stationary state which forever changes and transfers the condition of the previous balance. While growth is a gradual and stable change in the long term which arises with a gradual increase in the level of savings and population. This view has been widely accepted and described by the majority of economists.

According to other schools of thought, “economic growth means more output, while economic development employs more output and changes in its technical and institutional settings that have to be produced and distributed. Growth may not only involve more output that comes from a greater amount. Input But also greater, good efficiency, and increased output per unit input. Development exceeds these two using changes in the composition of output and in the allocation of input by sectors “. According to several classical economic economists is the expansion of the system in one dimension or more without changes in its structure, and development is an innovative process that leads the structural transformation of social systems.

Thus economic growth is related to quantitative sustainable improvement in output or per capita state income accompanied by expansion on labor, consumption, capital, and trading volume. On the other hand, economic development is a broader term. This is related to qualitative changes in the desires of the economy, goods, incentives, and institutions. This illustrates the determinants of the underlying growth such as technology and structural changes. Development embraces growth and decline. A economy can grow but it may not develop because of poverty, unemployment and inequality can continue to survive because there is no change in technology and structural. But it is difficult to imagine developments without economic growth without increased output per capita, especially when the population grows rapidly. Apart from this real difference, some economists use this term as synonyms.

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