Where appropriate make reference to a relevant case study.” Although economic growth and development are similar in meaning, they have some essential differences. Economic growth refers to the increasing ability of a nation to produce more goods and services. Economic development basically implies that individuals of that nation will be better off and takes into account changes in economic and social structures that will reduce or eliminate poverty. Economic development can be measured in a number of different ways including the Human Development Index, a Gender Empowerment Measure, a Human Poverty Index and a Human Freedom Index. All of these measures were developed by the United Nations Development Program.
Supporting this argument Giffins (1977) found that even if growth did benefit poor and poverty was reduced, not everyone in the poor sector reaped the gains (Fields, 1989). These arguments that growth did not necessarily lead to the alleviation of poverty were presumably based on the Kuznet Curve hypothesis. In short, the distribution of income gets worse and will not improve until a moderate level of income is reach. Subsequently, this could lead to years before poverty is reduced. However, some studies have found there to be no linear relationship between income inequality and economic growth (H & JR, 2004).
Objectives of Economic Growth and Development Economic growth is defined by, among other things, material capital formation, human capital formation and the creation of innovation. Put another way, economic growth is determined by the amounts and types of capital and labor that are invested, and how they are utilized for production. The objective of economic growth through economic policy is not necessarily GDP or GNP maximization but maybe enhancing and improving quality of life or other values that cannot be measured by GDP. If we limit our outlook to economic growth itself, the questions of what to assume as the objective of economic growth and how to measure it is decided by people. It is possible and desirable, to have a scheme wherein issues that are not easy to quantify, such as quality of life, are taken into account when policy choices are prepared and decisions carried out.
It is the real value of goods and services without the changes due to inflation or deflation (Mankiw 39). The real gross domestic product reflects the real money value and the growth margin in a state’s economy. Nominal gross domestic product refers to the value of GDP before accounting for the changes effected by inflation and deflation (Coyle 32). It shows the level of growth or shrinking of a country’s economy but does not put into consideration the consumer buying power. The value can be misleading to a nation because it does not reflect the real growth value of the economy.
A healthy and clean environment is surely an integral part for a good life, however this calculation tool does not take this into account. A nation may have a high per capita GDP but if it has a poor environment for the citizens the well being on the whole is bound to fall. GDP also does not take into account the economic disparities between different groups. GDP per person may be the same but one society may be better of than the other. GDP gives us a holistic picture of the country producing goods and services however fails to give us any information on the breakup of an individual average
Incomes and earnings may be very unequally distributed among the population and rising national prosperity can still be accompanied by rising relative poverty. So by using GDPyou may be hiding the differing extremes in a country. There are certain things that are difficult to measure using any statistical approach to living standards; these are also not reflected in GDPstatistic. The GDPdoes not take into account social problems in the community, and even though the statistics may be showing an increase in in... ... middle of paper ... ...econdary, and tertiary enrollments), and living standard (measured by GDPper capita in purchasing power parity terms. In this way, you still are provided with a single number for easy comparison between countries but include more information than simple GDPper capita.
The problem with this kind of models is that they do not study the effect of the income distribution over the degree of segregation. As a result, they can't answer questions like the following: the size of the coalitions decrease with the degree of wealth inequality? In a society, the size of the coalitions formed by wealthy agents are bigger than the coalition of the poor ones? This is an important weakness of this type of literature. In effect, the collective interrelation inside coalitions can determine the accumulation of social capital and human capital, and it is well-known that the both are essentials factors in economic development (Benabou, 1996a; Glomm y Ravikumar, 1992; Fernández y Rogerson, 1996; Durlauf, 1996) Some authors as Bénabou (1996th) and Glomm and Ravikumar (1992) compare the economic and distributive outcomes of integrated versus segregated societies.
Thus, the analysis rather static and the virtues of the status quo are assumed. Furthermore, the lack of government control does not make the market stronger and individual prosperity greater as expect. The uneven distribution of income would create tension between the classes. At the international level, the asymmetry in term of development between North and South shows that liberalism only serves the interests of the strong, particularly a few developed states. Thus, liberal trade policy can create tensions between states instead of bringing peace.
The monetary policy differentiates from country to country depending upon their economic conditions. In the less creating nations like India or Pakistan its destination may be the upkeep of financial dependability and help at present investment improvement. In the developed countries its objectives may be to achieve full employment, without inflation. There are several other objectives that are to be kept in my mind, which are: 1. Control of Inflation and Deflation: Inflation and deflation both are not suitable for the economy.
In advanced societies are closer to the ideal framework of economy than less advanced societies, and in patterns, the matter of modernization also is a problem of how human transform from Sacramento to New York or how Rome becomes more like America. But if economic sociologist begins with the assumption that “history is not sufficient”, there will be plenty of reasons are left to explain. Economic sociologist have to explain not only why nations vary in modern world in their economic practices, but also why they have variation in multiple paths in the