Economic Development Versus Growth

white and red train on rail road during daytime

Our ancestors lived in tranquil comfort from the daedalian problems of our generation. Much of their lives were spent merely discovering things and laying the cornerstones for us, but our generation however has made progress through the identification of nuances in things previously considered analogous or similar. Our progress over the years is based on two simple things actual differentiation and, "intelligible differentia". We have gradually come to understand the complex nature of things while distancing ourselves from the simplistic views previously held as orthodox.
With the advent of the concept of the 'economic man' (the assumption that humans are capable of being reasonable and that they always consider various factors before they decide on a specific economic or financial course of action) , economists  all over the world began using three words interchangeably namely progress, growth and development. During the nascent stages of the concepts’ introduction, there were hardly any doubts, people used them as they pleased, until the naiveté behind the concept of the economic man was exposed.
A deeper look into the famed concept revealed a number of flaws, the hypothesis per se was riddled with the primal, atavistic vices of the homo sapien species. People were easily swayed, they seemed to almost always succumb to temptation. This revelation brought about radical and abrupt change during the late 1980s when people finally began differentiating between the three aforementioned terms.
Progress was assigned a neutral position. It became a general term frequently used by experts to indicate some kind of improvement. Later on, progress went on to lose its significance as an economic term and ended up being allotted just its literal meaning.
Economic Growth
Growth or economic growth began to refer to an increase or an uptick in the economic variables or values over a period of time. The term was used in both individual and global scenarios. Growth in simple terms referred to the quantitative aspect of things (measurable; to that which a solid standard can be assigned to). Economic growth meant quantitative progress. Growth has typically been used as an annual measure but it is also possible to measure it for any given clear reference period. Apart from this growth was also classified as positive and negative, just growth meant positive growth whereas negative growth stated explicitly meant a decline in the economic variables.
Development on the other hand was assigned the antithetical idea of the quantitative growth concept, it was designated to be the more complex qualitative progress of an economy. Development indicates the quality of life as opposed to just the monetary aspect of an individual's life. The very first outlook included the following:
(1) Level of nutrition
(2) The expansion and reach of healthcare
(3) The level of education
(4) Access to other basic necessities.
However, one must always bear in mind that higher economic development requires higher economic growth. The possible economic scenarios are as follows: -
(1) Higher growth and higher development (occur when both growth and development complement each other and the economy thrives)
(2) Higher growth and lower development (occurs when there is high growth but the people of the economy are unsatisfied and lead miserable lives (US during the year 2012 is a stellar example of this, the economy was thriving but the people were very miserable and the country finally landed 14th in the World Happiness Report ))
(3) Lower growth and higher development (occur when the economy is in a bad shape but the people have been taken care of and lead wholesome, healthy lives)
(4) Lower growth and lower development (occur when both the economy and the welfare situation of the economy is in tatters, torn apart by a myriad of factors).
Simply put if economic growth is suitably used for development ,it will act as a catalyst for the economy to thrive on both sides since growth and development have a circular relationship .This is why numerous efforts have been taken to find a suitable measure for development including the HDI(Human development index) and WHR (World Happiness Report) .
Growth and development are important indicators of an economies condition but they are not always accurate or precise, especially development. It is important to remember that the end goal of economics is to simply provide for the betterment of human life on earth and that all of these indicators are plausible measures but never absolute, just like any other form of standard based testing.

Written By: T.S. Padma Charan
Edited By: Purav Nayak

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Economic Development Versus Growth Economic Development Versus Growth Reviewed by EMN on March 09, 2020 Rating: 5

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