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Development Economics Assignment

Development economics focuses on improving economic conditions in developing countries. Economic growth refers to increases in national or per capita income over the long run through improvements in productive capacity. Economic development is broader than growth, involving qualitative social and economic changes that contribute to well-being, such as increases in resources, capital formation, technology, and organization as well as more equitable income distribution and employment. Key barriers to growth and development include high population growth, illiteracy, poor infrastructure, inadequate human capital, foreign currency shortages, unsafe water, poor housing, social conflicts, corruption, and weak governance and health services.

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112 views2 pages

Development Economics Assignment

Development economics focuses on improving economic conditions in developing countries. Economic growth refers to increases in national or per capita income over the long run through improvements in productive capacity. Economic development is broader than growth, involving qualitative social and economic changes that contribute to well-being, such as increases in resources, capital formation, technology, and organization as well as more equitable income distribution and employment. Key barriers to growth and development include high population growth, illiteracy, poor infrastructure, inadequate human capital, foreign currency shortages, unsafe water, poor housing, social conflicts, corruption, and weak governance and health services.

Uploaded by

yedinkachaw shferaw
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Question 1

“Development economics is a branch of economics that focuses on improving fiscal, economic, and
social conditions in developing countries” (

Economic growth brings quantitative changes in the economy. Economic growth reflects the growth of
national or per capita income. Economic development implies changes in income, savings and
investment along with progressive changes in socio- economic structure of country (institutional and
technological changes)

3.1 ECONOMIC GROWTH The term economic growth is defined as the process whereby the country’s
real national and per capita income increases over a long period of time. This definition of economic
growth consists of the following features of economic growth: z Economic Growth implies a process of
increase in National Income and Per-Capita Income. The increase in Per-Capita income is the better
measure of Economic Growth since it reflects increase in the improvement of living standards of masses.
z Economic Growth is measured by increase in real National Income and not just the increase in money
income or the nominal national income. In other words the increase should be in terms of increase of
output of goods and services, and not due to a mere increase in the market prices of existing goods. z
Increase in Real Income should be Over a Long Period: The increase of real national income and per-
capita income should be sustained over a long period of time. The short-run seasonal or temporary
increases in income should not be confused with economic growth. z Increase in income should be
based on Increase in Productive Capacity: Increase in Income can be sustained only when this increase
results from some durable increase in productive capacity of the economy like modernization or use of
new technology in production, strengthening of infrastructure like transport network, improved
electricity generation etc.

3.2 ECONOMIC DEVELOPMENT

Economic development is defined as a sustained improvement in material well being of society.


Economic development is a wider concept than economic growth. Apart from growth of national
income, it includes changes – social, cultural, political as well as economic which contribute to material
progress. It contains changes in resource supplies, in the rate of capital formation, in size and
composition of population, in technology, skills and efficiency, in institutional and organizational set-up.
These changes fulfill the wider objectives of ensuring more equitable income distribution, greater
employment and poverty alleviation. In short, economic development is a process consisting of a long
chain of interrelated changes in fundamental factors of supply and in the structure of demand, leading
to a rise in the net national product of a country in the long run. 29 Economic Growth and Economic
Development ECONOMICS MODULE - 2 Current challenges before the Indian Economy Notes The
economic growth is a narrow term. It involves increase in output in quantitative terms but economic
development includes changes in qualitative terms such as social attitudes and customs along with
quantitative growth of output or national income. Economic development without growth is almost
inconceivable. The comparison between the two concepts is given in the following table:
4 ,What are the obstacles of economic growth and development?
Barriers to Economic Growth and Development
 These obstacles are: high population growth rates, high illiteracy rates, poor
infrastructure, human capital inadequacies, foreign currency gap and capital flight,
unsafe water supplies, inadequate housing facilities, ethnic and religious conflict, corruption,
poor governance, poor health services, primary product ...13 ጃንዩ 2021

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