Review of Growth, Development and Inequality

Introduction
With the time all concepts in the world are evolved fresh definitions, better ways of calculating and new dimensions are introduced to the world by scholars based on their research findings. Growth Development and inequality have no different all these three concepts have also been evolving . As a results of this evolution we have to update our knowledge to be compatible with the current dynamic world.

Economic growth
Economic growth can be defined as a positive change in the level of production of goods and services by a country over a certain period of time. Economic growth is a usually brought about by technological innovation and positive external forces. Economic growth per capita is primarily driven by improvements in productivity, also called economic efficiency. Increased productivity means producing more goods and services with the same inputs of labour , capital, energy and materials.

Development
Development is a multidimensional process, which is usually discussed in term of a set of various social and economic goals. The dimensions of development are extremely diverse, including economic, social, political, legal and institutional structures, technology in various forms, the environment, religion, the arts and culture. The development is not just confined to income levels and encompasses many more indicators such a life expectancy, education, health and many other factors that go in to improvement the quality of life . Countries that increase their income but do not also raise life expectancy reduce infant mortality, and increase literacy rates are missing out of some important aspects of development. Economic development implies more , particularly improvements in health, education and other aspects of human welfare.

Growth vs development
Economic growth is a narrower concept than economic development. Economic growth is usually expressed in terms of the gross domestic product(G.D.P). Development is more of a vague measure usually incorporating social measures such as literacy rates or life expectancy as a means of measuring a countrys levels of development. How ever, it is seen that general, when there is economic development, economic growth is invariably there. Examples of countries like China and India that have huge G.D.P. but not labeled developed because of their lowly ranks on other parameters such as health, education and life expectancy is enough to demonstrate the difference between economic growth and development.

Inequality
Inequality is defined as the fundamental disparity that permits one individual certain material choices, while denying another individual those very same choices. Inequality is different from poverty, inequality pays attention to variations in living standards across a whole population. Comparison of inequality between two or more groups can be on the basis of nationality, ethnicity, race, gender, sector or residence.

Methodology Categorizing Countries

Basis of the Level of Development
Developed Emerging Least Developed

Geographical regions
America Africa Asia Europe

Analyzing Growth, Development, Inequality

Economic Growth

Characteristics of economic growth

High rates of growth of per capita incomes. High rates of growth of total factor productivity. High rates of structural transformation of the economy. High rates of social and ideological transformation. Growth of trade, specifically import of raw materials and export of manufactures. Limited spread of development to only a third of the world population

Measure the Economic growth

Gross Domestic Product (GDP) GDP = consumer spending + investment + government spending + (exports imports) Gross National Product (GNP) GNP = GDP + net receipts (total income from abroad) Real GDP GDP after adjustment for inflation also known as real GDP real GDP per person. real GDP and divides it by the number of people in the country. The contribution of real GDP growth to the change in the standard of living depends on the growth rate of real GDP per person. Growth and the Production Possibility Frontier

Economic growth when a country is operating below capacity more of both capital and consumer goods are made available as the economy moves from point A to point B Country operating at full capacity but discovers new resources or find ways of improving the efficiency of existing resources, economy moves to point C

Analysis of Growth using GDP

Country Category Country Name 2007 China Emerging Economies Brazil Russia India Mexico South Korea Indonesia Turkey Sudan Least Developed Uganda Zambia Bangladesh Afghanistan Samoa Sierra Leone 14.2 6.1 8.5 10.0 3.2 5.1 6.3 4.7 11.5 8.4 6.2 6.3 13.7 1.8 6.4 3.4 3.4 2.2 2.8 1.9 3.9 4.7 2.7 2008 9.6 5.2 5.2 6.2 1.2 2.3 6.0 0.7 3.2 8.8 5.7 6.0 3.6 4.3 5.5 -0.8 0.8 0.7 -0.1 -0.3 1.8 2.5 0.0 GDP 2009 9.2 -0.3 -7.8 6.6 -6.3 0.3 4.6 -4.8 3.0 7.2 6.4 5.9 21.0 -5.4 3.2 -4.8 -5.1 -2.8 -2.1 -3.5 3.5 1.4 -1.7 2010 10.4 7.5 4.3 10.6 5.5 6.3 6.2 9.0 4.5 5.9 7.6 6.4 8.4 0.2 5.0 5.8 3.6 3.2 1.2 3.0 1.6 2.5 0.7 2011 9.2 2.7 4.3 7.2 4.0 3.6 6.5 8.5 -3.9 6.7 6.6 6.1 5.7 2.1 5.3 4.0 3.1 2.5 1.4 1.7 1.3 2.0 1.7

Developed

Sweden Germany Canada New Zealand USA Netherlands Australia Norway

Analysis of Growth using GDP

10.0

8.0

Emerging Least Developed

6.0

GDP Growth %

4.0

2.0

0.0

-2.0

-4.0

Country

Development
an increase in living standards, improvement in self-esteem needs and freedom from oppression as well as a greater choice

Dimensions of development
Economic Social Political Legal Technology Environment

Difference in Human Development Index among selected economies

Inequality or poverty
Poverty focuses only on those, whose standard of living falls below an appropriate threshold level. Inequality pays attention to variations in living standards across a whole population.

Education Health Nutrition Security Power Income or consumption Assets.

Evolution of Inequality
Early Days Inequality of wealth leads to a higher marginal propensity to save. Now Economies whose inequality levels are lower for a considerable period of time can acquire a better growth rate than economies with higher inequality level

Analysis of global inequality using Gini Coefficient

Conclusion

Growth

Development

Q&A