Thursday, September 12, 2013

Economic Development
Economic Growth
Economic 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.
Development 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.
Qualitative.HDI (Human Development Index), gender- related index (GDI), Human poverty index (HPI), infant mortality, literacy rate etc.
Quantitative. Increase in real GDP. Shown by PPF.
Brings qualitative and quantitative changes in the economy
Brings quantitative changes in the economy
Normative concept
Narrower concept than economic development
Economic 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.

Jagdish Bhagwati v/s Amartya Sen debate 

(Although , I believe ...that this type of debate has been glamourised by MEDIA.and have gave a political colours to it ....but still v wl see what it is all about ! ...since v r UPSC Aspirants )

Amartya Sen and Jagdish Bhagwati, tackling each other on what India’s governance priorities should be. 

Sen is a Nobel Prize winner in economics and a professor of economics and philosophy at Harvard University. 

Bhagwati is a Columbia University professor of economics, who has been nominated for the top honour several times. Along with Sen and Avinash Dixit, he is considered to be among the three greatest Indian economists ever.

  • While Sen believes that India should invest more in its social infrastructure to boost the productivity of its people and thereby raise growth.
  • Bhagwati argues that only a focus on growth can yield enough resources for investing in social sector schemes. 
  • Investing in health and education to improve human capabilities is central to Sen’s scheme of things. Without such investments, inequality will widen and the growth process itself will falter, Sen believes. 
  • Bhagwati argues that growth may raise inequality initially but sustained growth will eventually raise enough resources for the state to redistribute and mitigate the effects of the initial inequality.
Kerala Vs Gujarat

·         The Bhagwati-Panagariya duo argues that whatever Kerala had achieved was thanks to a growth-oriented approach. They suggest that Kerala's high social indicators have much less to do with the so-called Kerala model, and more to do with global trade, growth-oriented policies and private-sector participation. "To keep asserting such causality [Sen's argument] is the mark of a lazy intellect and is, besides, dangerous in its potential for misleading us to make harmful policy choices," 

·         But many economists argue that this amounts to misrepresentation of facts. Says Suresh Babu, a professor of economics at IIT Madras: "In the current debate we need to be careful to not confuse between 'levels' and 'rates of change'. Professor Bhagwati focuses more on rates of change, while Sen argues that levels matter. For Gujarat some recent rates of change might look impressive, as it is on a small base, while for Kerala even incremental changes on high levels are impressive as they are difficult to come by."



Blog Archive