ECONOMIC GROWTH AND DEVELOPMENT

ECONOMIC GROWTH AND DEVELOPMENTGroup 8Cawagas, Fedelene JoyDeleste, Krisha NicoleDe Juan, RoevarcFalsis, Hamuel IllielGaitan, Aurora Demi DoreenTumabotabo, Anne Rae

What is Economic Growth?Increase in a country's real level of national output.Increase in the quantity of resources & improvements intechnologyor in another way anincrease in the value of goods and services produced by every sector of the economy. Does not take into account the depletion of natural resources which might lead to pollution, congestion & disease.Measures an increase in Real GDP. (real Output). GDP is a measure of the national income / national output and national expenditure. It basically measures the total volume of goods and services produced in an economy.

Economic DevelopmentIncrease in living standards, improvement in self-esteem needs and freedom from oppression as well as a greater choice.Most accurate method of measuring development is theHuman Development Indexwhich takes into account the literacy rates & life expectancy whichaffectproductivity and could lead to Economic Growth.Leads to the creation of more opportunities in the sectors of education, healthcare, employment and the conservation of the environment.Implies an increase in the per capitaincomeIs concerned with how people are actually affected. Looks at the actual living standardsof every citizen.

Economic Development versus Economic GrowthEconomic DevelopmentEconomic GrowthImplicationsEconomic development implies changes in income, savings and investment along with progressive changes in socio-economic structure of country (institutional and technological changes).Economic growth refers to an increase in the real output of goods and services in the country.FactorsDevelopment relates to growth of human capital indexes, a decrease in inequality figures, and structural changes that improve the general population's quality of life.Growth relates to a gradual increase in one of the components of Gross Domestic Product: consumption, government spending, investment, net exports.MeasurementQualitative.HDI (Human Development Index), gender- related index (GDI), Human poverty index (HPI), infant mortality, literacy rate etc.Quantitative. Increases in real GDP.

ContinuationEffectBrings qualitative and quantitative changes in the economyBrings quantitative changes in the economyRelevanceEconomic development is more relevant to measure progress and quality of life in developing nations.Economic growth is a more relevant metric for progress in developed countries. But it's widely used in all countries because growth is a necessary condition for development.ScopeConcerned with structural changes in the economyGrowth is concerned with increase in the economy's output

Formula for calculating Economic Growth

We can express the rate of growth in, for example, the period 2004-2005, as follows:Growth rate of GDP = [GDP(2005) - GDP(2004)]/ GDP(2004) 100

U.S. real GDP in 2004 was 10.76 trillion and in 2005 it was 11.13 trillion. Thus the growth rate of real U.S. GDP from 2004 to 2005 was

(11.13 10.76) / 10.76 = (0.37) / 10.76 = 0.034 or 3.4%

Formula used in calculating the Gross National Product

Gross national product (GNP)is the total value of final goods and services produced during a given period by the citizens of a country no matter where they live. The goods and services are produced by the nationals of a country.

GNP are expressed in monetary terms, thus rely on the markets to establish the relative values of goods and services.

The formula for GNP is:GNP = Consumption + Government Expenditures +Investments+ Exports + Foreign Production by U.S. Companies Domestic Production by Foreign Companies

How it works :

GNP includesincomeearned by citizens and companies abroad, but does not include income earned by foreigners within the country.

The figures used to assess GNP include the manufacturing of tangible goods (cars, furniture and agricultural products) and the provision of services (education, healthcare, and business services).

GNP does not include the services used to produce manufactured goods because their value is included in the price of the finished product. However, GNP does includedepreciationand indirect businesstaxeslikesales tax.

Methods used to assess Economic Development

Methods used to assess Economic DevelopmentGNP per capitaPopulation Growth Occupational Structure of the Labor ForceUrbanization Consumption per capitaInfrastructures

GNP per CapitaGNP isthe total market value of all final goods and services produced by a country in one year. It is a measure of economic activity, or how much is produced in a country. The more that a country produces per person , the more "developed" it is assumed to be.

Population Growth

In general, poorer countries have more rapid rates of population growth thus affecting their economic development in a way that there is an unequal distribution of goods and services especially among large, poor families.

Occupational Structure of the Labor Force As countries develop, the occupational structure of the labor force changes. In least developed countries, most people are engaged in primary activities like agriculture, fishing, mining and lumbering. In high income countries like the United states most people are involved with the tertiary sector like retailing, transportation, education and banking. The better the labor force opportunities signifies a more developed country.

Urbanization Urbanization isthe percentage of a country's population who live in urban areas. Urban areas generally means in towns and cities of 2,500 or more people. Currently just less than half of the worlds population live in urban areas. Generally as countries develop urbanization increases.

Consumption per capita Consumption per person is a good indicator of development. The richer a country is, the more its citizens consume.

InfrastracturesA country's infrastructure is defined by our author as "the foundations of a society: urban centers, transport networks, communications, energy distribution systems, farms, factories, mines, and such facilities as schools, hospitals, postal services, and police and armed forces." For instance, the development of the transportation system as a measure of its length per area of land has a greater degree of economic development assumed because of its transportation infrastractures.

List of Countries according to Stages of Economic Growth.

RankCountryValue1Switzerland 5.72Singapore 5.63United States 5.54Finland 5.55Germany 5.56Japan 5.57Hong Kong SAR 5.58Netherlands 5.59United Kingdom 5.410Sweden 5.4

Top 10 Competitive Countries in the World 2014-2015 reportSource: http://reports.weforum.org/global-competitiveness-report-2014-2015/

RankCountryHDI Score1Norway0.9442Australia 0.9333Switzerland0.9174Netherlands0.9155United States0.9146Germany0.9117New Zealand0.9108Canada0.9029Singapore0.90110Denmark0.900

10 Most Developed Countries in the World 2015 (HDI)Source: http://www.richestlifestyle.com/10-most-developed-countries-in-the-world/

RankCountryGDP per Capita (est.)1Qatar$145,8942Luxembourg$90,333 3Singapore$78,7624Brunei$73,8235Kuwait$70,7856Norway$64,3637United Arab Emirates$63,1818San Marino$62,7669Switzerland$53,97710United States$53,001

Top 10 Richest Countries 2015Source: http://mixtopten.com/top-10-richest-countries-for-2015/