Economic Growth vs. Economic Development

Economic Growth:

• Economic growth refers to the increase in a country’s output of goods and services over time, typically measured by GDP (Gross Domestic Product).
• It is quantitative, focusing on how much the economy is producing.
• Example: A 5% increase in GDP over a year.

Economic Development:

• Economic development is a broader concept, involving improvements in living standards, health, education, and income distribution.
• It focuses on quality of life and well-being.
• Example: A country reducing poverty levels and improving healthcare systems.

Human Development Index (HDI) and Economic Development

The qualitative aspect of economic development is captured by the Human Development Index (HDI), which combines three key factors:

• Life Expectancy: A measure of health and longevity.
• Education: Access to knowledge, measured by literacy rates and school enrollment.
• Income: Adjusted for purchasing power, measuring the standard of living.

HDI is a composite index that helps assess the broader well-being of a population, moving beyond just economic output to include social factors. For example, higher HDI scores indicate a higher standard of living and greater human development.