Economic growth and economic development.are two important terms frequently used in the same sense. The term Economic Growth is used interchangeably with the term Economic Development. But some economists like Schumpeter and Mrs. Ursula Hicks have made a distinction between these Economic Growth And Economic Development. Economic growth indicates increase in production due to institutional and technological changes.
Difference Between Economic Growth And Economic Development
1) Economic Growth refers to the problems of developed economies. Economic Development refers to the problems of underdeveloped or developing economies.
2) According to Schumpeter economic growth relates to a steady and gradual increase in the rate of savings and population. Economic development involves the growth of a stationery state to a higher level of equilibrium.
3) Economic growth relates to the optimum utilization and development of underutilized resources in the advanced countries. But economic development relates to the utilization and development of unused resources in the under-developed countries.
4) According to Madison the raising of income levels in the advanced countries is called economic growth and in poor countries it is called economic development.
5) Economic growth refers to an increase in the real output of goods and services in the country. The term economic development implies progressive changes in the socioeconomic structure of a country.
6) According to Prof. Kindleberger economic growth indicates quantitative changes. Economic development on indicates both quantitative and qualitative changes.
7) According to Prof. Milton economic growth refers to a rise in output and economic development implies changes in output as well distribution of income.
To know the distinction between the terms economic growth and economic development we can take the growth of person as example. Growth in the size of the body may be compared to economic growth whereas changes in the individuality, social, mental attitudes may be compared to economic development. The growth without development is not important. We cannot imagine growth without development. Because, development and growth are two sides of the same coin. Thus, the terms growth and development are interdependent on each other.