File Name: measures of economic growth and development .zip
Economic development is the process of improving economic welfare in an economy. For example, an undeveloped economy will be primarily based on agriculture and very limited social services such as health care and education. Economic development involves an increase in real incomes, higher life expectancy, lower poverty and a greater provision of basic amenities. To measure rates of economic development for low-income countries it examines education, life expectancy, rates of absolute poverty and access to health care and safe drinking water.
As economic growth and economic development work on different areas of the economy, their respective progress is measured in different ways. Measuring economic growth and development comes with unique criteria for each. Below, we explore how each process is measured to determine accurate results and measuring the growth of an economy, as well as how to measure the intangible factors that are related to economic development. The Gross Domestic Product GDP is a measure of the market value of goods and services provided by a country over a period of time, often one year or one quarter. The GDP is calculated by estimating the gross output of goods and services by the country, and subtracting the intermediate consumption the cost of materials and services used to produce the goods or services sold.
In the economic study of the public sector , economic and social development is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and objectives. The term has been used frequently in the 20th and 21st centuries, but the concept has existed in the West for far longer. Whereas economic development is a policy intervention aiming to improve the well-being of people, economic growth is a phenomenon of market productivity and increases in GDP ; economist Amartya Sen describes economic growth as but "one aspect of the process of economic development". Economists primarily focus on the growth aspect and the economy at large, whereas researchers of community economic development concern themselves with socioeconomic development as well. The precise definition of economic development has been contested: while economists in the 20th century viewed development primarily in terms of economic growth , sociologists instead emphasized broader processes of change and modernization.
In the very first sentence of the book entitled Whose Development? It might seem rhetorical at first, but by no means is it so. Many writers argue that, after six decades of the so called development project aimed at raising the Third World out of poverty and improving the well-being of its citizens, one can speak of anything but true transformation.
Economic growth is an increase in the production of goods and services over a specific period. To be most accurate, the measurement must remove the effects of inflation. Economic growth creates more profit for businesses. As a result, stock prices rise. As more jobs are created, incomes rise. Consumers have more money to buy additional products and services. Purchases drive higher economic growth.
We repeat here the notes from module 1. You need to make sure that you have a clear understanding of the differences between economic growth and development. This occurs where there is an increase in the productive potential of the economy and is best measured by the increase in a country's real level of output over a period of time, i. Economic development, on the other hand, is a process where there is improvement in the lives of all people in the country. This involves not only living standards, such as greater availability of goods and services and also the ability to purchase them but also the promotion of attributes such as self-esteem, dignity and respect, and the enlarging of people's freedom to choose and to take control of their own lives. While a country may grow richer therefore, through the growth of its real output, it does not necessarily mean that it will develop.
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