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ECONOMIC GROWTH and DEVELOPMENT ECONOMIC GROWTH

- An increase in the capacity of an economy to produce goods and services, compared from one period of time to another. Economic growth can be measured in nominal terms, which include inflation, or in real terms, which are adjusted for inflation. For comparing one country's economic growth to another, GDP or GNP per capita should be used as these take into account population differences between countries.

Economic Development - Progress in an economy, or the qualitative measure of this. Economic development usually refers to the adoption of new technologies, transition from agriculture-based to industry-based economy, and general improvement in living standards.

STAGES OF ECONOMIC GROWTH AND DEVELOPMENT

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Note: Just focus on the GDP Range. This range is the basis of classifying the stage of development of different countries based on their GDP http://reports.weforum.org/global-competitiveness-report-2014-2015/methodology/The Five Stages of Development:1. Traditional Society- Refers to a country that has yet to begin developing, where a high percentage of people are involved with agriculture and a high percentage of the countrys wealth is invested in activities such as the military and religion, seen as nonproductive by Rostow. These are societies which have pre-scientific understandings of gadgets, and believe that gods or spirits facilitate the procurement of goods, rather than man and his own ingenuity.

2. Transitional Stage

AKA the preconditions for takeoff. Under the model, the process of development begins when an elite group initiates innovations economic activities. Under the influence of these well-educated leaders, the country starts to invest in new technology and infrastructure, such as water supplies and transportation systems. These projects will ultimately stimulate an increase in productivity likely increasing the GDP. There is a limited production function, and therefore a limited output. There are limited economic techniques available and these restrictions create a limit to what can be produced. Increased specialization generates surpluses for trading. There is an emergence of a transport infrastructure to support trade. External trade also occurs concentrating on primary products.3. Takeoff

Rapid growth is generated in a limited number of economic activities, such as textiles or food products. These few, takeoff industries achieve technical advances and become productive, whereas other sectors of the economy remain dominated by traditional practices. After take-off, a country will take as long as fifty to one hundred years to reach maturity. Globally, this stage occurred during the Industrial Revolution. Industrialization increases, with workers switching from the agricultural sector to the manufacturing sector. The level of investment reaches over 10% of GNP. The growth is self-sustaining as investment leads to increasing incomes in turn generating more savings to finance further investment.

4. Drive to maturity

-Modern technology, previously confined to a few takeoff industries, diffuses to a wide variety of industries, which then experience rapid growth comparable to the takeoff industries. Workers become more skilled and specialized. The economy is diversifying into new areas the economy is producing a wide range of goods and services and there is less reliance on imports.

5. High Mass Consumption- AKA age of mass consumption. The economy shifts from production of heavy industry such as steel and energy, to consumer goods, such as motor vehicles and refrigerators. Of particular note is the fact that Rostow's "Age of High Mass Consumption" dovetails with (occurring before) Daniel Bell's hypothesized "Post-Industrial Society." The Bell and Rostovian models collectively suggest that economic maturation inevitably brings on job-growth which can be followed by wage escalation in the secondary economic sector (manufacturing), which is then followed by dramatic growth in the tertiary economic sector (commerce and services).http://www.lewishistoricalsociety.com/wiki/tiki-read_article.php?articleId=72#

List of Countries According to Economic Growth

http://reports.weforum.org/global-competitiveness-report-2014-2015/methodology/Macroeconomics - Gross Domestic Product (GDP)Two different approaches are used to calculate GDP. In theory, the amount spent for goods and services should be equal to the income paid to produce the goods and services, and other costs associated with those goods and services. Calculating GDP by adding up expenditures is called the expenditure approach, and computing GDP by examining income for resources (sometimes referred to as gross domestic income, or GDI, is known as the resource cost/income approach.Expenditure ApproachThe expenditure approach utilizes four main components:

Consumption (C) - These are personal consumption expenditures. They are typically broken down into the following categories: durable goods, non-durable goods, and services.

Investment (I) - This is gross private investment; it is generally broken down into fixed investment and changes in business inventories.Government (G) - This category includes government spending on items that are "consumed" in the current period, such as office supplies and gasoline; and also capital goods, such as highways, missiles, and dams. Note that transfer payments are not included in GDP, as they are not part of current production.

Net Exports (X - M) - This is calculated by subtracting a nations imports (M) from exports (X). Imports are goods and services produced outside the country and consumed within, and exports are goods and services produced domestically and sold to foreigners. Note that this number may be negative, which has occurred in the U.S. for the last several years. Net exports for the U.S. were minus $606 billion during calendar year 2004 (as per Bureau of Economic Analysis, U.S. Department of Commerce June 29, 2005 press release).

FORMULA: GDP = C + I + G + (X - M)Gross National Product - an economic statistic which includes Gross Domestic Product, plus any income earned by the residents from investments made overseas. Also, the income earned within the domestic economy by overseas residents. As explained by Investopedia, Gross National Product (GNP) refers to a quantification of economic performance of a country. Also, it measures whatever goods and services are generated by the citizens and whether these are produced within the borders of the country.

The general formula used for Gross National Product is:

GNP = GDP + Net factor income from abroad

Where, GDP = Gross Domestic Product Net factor income from abroad = income earned in foreign countries by the residents of a country income earned by non-residents in that country

Methods used to assess economic development

Regional OutputGross Regional Product (GRP) or Value AddedWagesEmploymentOthers which includes Productivity, Capital Investment, Property Value Appreciation, Tax Revenue and Public Expenditure Changes.Top Ten Global Economic Challenge1. Energy and Environmental Security2. Conflict and Poverty3. Competing in a New Era of Globalization4. Global Imbalances5. Rise of New Powers6. Economic Exclusion in the Middle East7. Global Corporations, Global Impact8. Global Health Crises9. Global Governance Stalemate 10. Global Poverty: New Actors, New Approaches