The economic growth and economic development

Ekonomia III

Magdalena Cupryjak 91506

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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

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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

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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

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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

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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

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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

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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

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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