Question

What is the difference between economic development and economic growth? Give examples of how each of these concepts can be measured.

Answer 1

Economic Growth is a quantitative measure that measures the growth in macroeconomic parameters of the economy. It is measured by change in GDP or GDP growth rate, change in capital stock, change in investment etc.

Whereas economic development is a qualitative measure that includes a change in both economic and non-economic parameters (environmental). It measures the distribution of economic resources between different sections of the society, it measures the impact of economic activities on the environment, it measures how sustainable is the growth,

It is measured as GDP per capita, Income inequality ratio, Happiness index, Health index etc.