Growth & Development
| Growth | Development |
|---|---|
| One-dimensional | Multi-dimensional |
| e.g. Continuous increase in the output over a period of time | More comprehensive |
| Quantitative | Qualitative |
- Some indicators
- GDP \(\to\) Floor variable/ indicator (dynamic or continuous)
- indicates demand
- \(c + i + g\) (India is a consumption driven economy, but may change)
- includes Goods and Services
- CPI
- Not services, not all goods
- GNP / GNI = GDP + NFIA
- GDP \(\gt\) GNI, because in developing countries NFIFA is usually negative
- GDP \(\to\) Floor variable/ indicator (dynamic or continuous)
| Extensive | Intensive |
|---|---|
| Standard of Living (Economies of scale) | Given more importance to the 'per-capita' aspect |
| Commodity (goods etc) | Factor markets (skill sets) |
- Why is the process of growth important
- Policy Making (e.g. Recession, monetary policy)
- Capital formation
0.1 Importance of economic growth¶
- Choices are more when the country is developed. Don't need to depend only on one sector
- Social conflicts in developing country. A zero sum game. Need to remove for one in order to provide to another
- Poverty & inequality paradox: > As income increases, inequality rises, for many emerging economies, growth led people out of poverty but it increased inequality.
- Spill-over effects of growth