The economic growth and economic development
Ekonomia III
Magdalena Cupryjak 91506
1 |
S t r o n a
In the conditions of modern economic development and economic growth determine
the position of a state in the international arena. Moreover, they are responsible for the
standard of living and investment attractiveness.
Economic growth and development are often used interchangeably, however, they do
not describe the same phenomenon. Economic growth is augmentations ability of a society to
produce goods and services. In economic theory this term is used to describe changes in
quantitative rather than qualitative. The process of qualitative change is called economic
development. Commonly known measure of economic growth is the increase in real gross
domestic product. Often it is given as a supplement to GDP per capita
1
.
As the main source of economic growth can be considered a common private property,
freedom of exchange of domestic and international, competitiveness and innovation,
monetary stability, the existence of efficient capital markets and low taxes. In a short time, a
key driver of growth is consumer demand and investment - domestic and foreign. In the long
term strength is sufficient supply and efficiency factors
2
.
The most important measures of economic growth of society are:
Gross domestic product - the value of goods and services produced in the country
during the year by the society,
Gross national product - the value of goods and services produced by the country's
citizens (even abroad) during the year,
The rate of growth of national income - is the ratio of the national income in the period
to the size of the national income in the base period,
The size of the Gross Domestic Product per capita
3
.
Economic development is a long-term process of changes in the economy. It includes
changes in the quantitative growth of production, employment, investment, capital size,
1
“Economic growth”, Investopedia, website:
http://www.investopedia.com/terms/e/economicgrowth.asp
2
“Sources of economic growth”, Department of International Development, available on website:
www.gov.uk\government
3
“What are the best measurements of economic growth?”, website:
http://www.investopedia.com/ask/answers/032515/what-are-best-measurements-economic-growth.asp
The economic growth and economic development
Ekonomia III
Magdalena Cupryjak 91506
2 |
S t r o n a
income, consumption and other economic values that characterize the economy from the
quantitative as well as qualitative changes or structural changes. Economic development
causes changes in the structure of Gross Domestic Product and changes in the structure of
employment
4
.
There are four main factors of economic development;
Human capital - knowledge resources and capabilities of people. It should be
characterized by competition and exclusivity. The knowledge and skills of people are
an important factor in the production of goods and services.
Land and raw materials - earth provides access to minerals and minerals, gives the
benefits of space for construction and other uses. It is a basic factor of production. It is
characterized by constancy position, the inability to multiply, incorruptibility at the
rational use.
Technical progress - methods of preparation and confirmation process of
manufacturing or processing of goods and information. It is characterized by
optimizing production and minimizing costs.
Investments - economic outlay incurred for the maintenance, creation and increase
capital. Should be characterized by a specific time of the investment, expenditure
incurred for the implementation, the expected benefits of the investment and the
possibility of investment risk
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.
The functioning of the economy and the state creates many obstacles for normal growth
and development. There are two main categories of barriers;
political and economic barriers;
Systemic and ideological barriers
Lack of internal stabilization of political relations
Barriers political division of the world
institutional and organizational barriers
4
“Economic development”, website:
http://www.whatiseconomics.org/economic-development
5
“5 factors that affect the economic growth of a country”, website:
http://www.economicsdiscussion.net/economic-growth/5-factors-that-affect-the-economic-growth-of-a-
country/4199
The economic growth and economic development
Ekonomia III
Magdalena Cupryjak 91506
3 |
S t r o n a
Socio-economic barriers:
demographic barrier
Barrier real wage
Barrier social infrastructure
Barrier food
6
.
Picture 1. Poland - Economic forecast summary.
Source:
http://www.oecd.org/economy/poland-economic-forecast-summary.html
Real GDP should continue to grow around 3½ per cent annually, supported by solid
investment and consumption growth. Considerable infrastructure investment supported by EU
funds will continue to underpin productivity and GDP growth, despite a temporary slowdown
in 2016 at the switchover of budget periods for EU funds. Consumer price inflation is
expected to gradually recover as the effect of sharp falls in energy and food prices fades
7
.
The concept of economic growth and development that is linked to fluctuations of
slow growth. Such a phenomenon is called the business cycle. It has four phases;
6
“Barriers to economic growth and economic development”, IB Economics, Unit 31, December 2006, p. 329,
website:
www.business-tes.wikispaces.com
7
„Poland - Economic forecast summary.”, OECD – better policies for better lives, website:
http://www.oecd.org/economy/poland-economic-forecast-summary.html
The economic growth and economic development
Ekonomia III
Magdalena Cupryjak 91506
4 |
S t r o n a
Phase recovery - growth in investment, consumption and GDP, and a fall in
unemployment,
Phase flowering - an increase in investment, consumption and GDP, reduction of
unemployment. In addition, there is the phenomenon of inflation and the trade deficit
as a symptom of economic imbalances,
Phase slowdown - decline in investment, consumption and GDP, rising
unemployment, inflation and trade deficits,
Phase recession - the decline in investment, consumption and GDP, rising
unemployment and improving the economic imbalances - the decline in inflation and
the trade deficit
8
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.
The benefit of economic growth and development is to increase the standard of living,
better social situation, increased public safety - which is why every government is fighting to
economy rapidly but steadily developed for the good of their society.
8
„Business Cycle”, Investopedia, website:
http://www.investopedia.com/terms/b/businesscycle.asp
9
„What is the business cycle?”, website:
http://useconomy.about.com/od/glossary/g/business_cycle.htm
The economic growth and economic development
Ekonomia III
Magdalena Cupryjak 91506
5 |
S t r o n a
Sources:
I.
Articles and books:
“Barriers to economic growth and economic development”, IB Economics,
Unit 31, December 2006
“Sources of economic growth”, Department of International Development
II.
Websites:
www.useconomy.about.com
www.investopedia.com
www.business-tes.wikispaces.com
www.oecd.org
www.whatiseconomics.org
www.economicsdiscussion.net
www.gov.uk