Economic Growth + Development Annoyances (1 Viewer)

[drewgcn]

We've been given two textbooks from our school, was making some notes and just realised an anomaly with the two.

The first - Leading Edge "Australia in the Global Economy" describes economic growth as a measure of change in real GNP per capita and economic development as the HDI.

The second - J. Bulmer's "Updated Economics" describes economic growth as a measure of real GDP (raw - not per capita)and economic development as real GDP per capita.

Personally I would have thought them both half-correct, that economic growth would be based on real GDPs, and economic development as based on the HDI, but I'm not entirely sure now, seeing as neither textbook even mentions the other measure.

 

[Sparcod]

We've been given two textbooks from our school, was making some notes and just realised an anomaly with the two.

The first - Leading Edge "Australia in the Global Economy" describes economic growth as a measure of change in real GNP per capita and economic development as the HDI.

The second - J. Bulmer's "Updated Economics" describes economic growth as a measure of real GDP (raw - not per capita)and economic development as real GDP per capita.

Personally I would have thought them both half-correct, that economic growth would be based on real GDPs, and economic development as based on the HDI, but I'm not entirely sure now, seeing as neither textbook even mentions the other measure.

Wow! Making Notes eh?
I dont know what your question is but i'll tell you everything i know.
Economic Growth =The percentage change in gross domestic product-GDP

(NB. GDP is spending, investment and govt expenditure added to net exports)

Economic Growth is given
Change in GDP( Current minus Last)/Last Years GDP %


Real GDP: the gdp which takes into account inflation to get "the real value" not the inflated value. The GDP might've went up but was it due to growth or inflation???

It's given by the unreal gdp X base CPI/the year's CPI

Per Capita income is just the GDP divided by the population. To find out how much money, on average, each person gets.

Hope that helps.

 

[Demandred]

Most textbooks, including univesrity level ones, follow the Leading Edge definition.

 

[Sparcod]

Economic Development
= Health Factor(life expectancy) + Education Factor(Literacy) + Real GDP percapita

HDI is the human development index measured by the UN.

Norway, i think has the highest with 0.95.

Healthy workforce means good healthcare system and good dietry needs as well as good sanitation.
Educated workforce means high spending on education and hence, very skilled and productive workforce.
These two are "quality of life" indicators.
GDP per capita means how productive they are.

eg. Australia has a lower real GDP per capita income than the USA but has better economic development due to our high life expectancy and literacy rates.

That's what they mean by eco. development.

 

[Sparcod]

Most textbooks, including univesrity level ones, follow the Leading Edge definition.

I havent got leading edge.
I've got Bulmer's updated economics. I use this site for resources though. Are there other good resources??

 

[Demandred]

Ok, your definition nearly hits the spot Smart_Dunce.

 

[Sparcod]

Oh i can see myself struggling in economics. I hope i was correct- that would mean that know something.

Ok, your definition nearly hits the spot Smart_Dunce.

What do you mean?

 

[drewgcn]

Thanks Smart_dunce, though you pretty much just confirmed what I said. Still, kudos for embellishments. (Btw, I thought you went to Tech as well. Shouldn't you have both textbooks?
P.S. Who are you)

Btw I always thought that formula to work out real GDP was far more complicated than it need be. Really, you can just remember

Real GDP = Unreal GDP (aka money GDP) ÷ CPI.

Which is logical anyway, since its unreal gdp divided by the inflation rate.

 

[Sparcod]

CPI is the index that measures inflation.

 

[Demandred]

It's the opposite, inflation measures the changes in CPI. When you said 'I haven't got leading edge', I thought you implied that you did not know the full definition of economic development.

 

[Sparcod]

drewgcn, if you got any other questions, just ask! I might be able to answer them.

 

[mitsui]

just want to comfirm that. ><

so

economic growth is the change in real GDP % (where real GDP is GDP take away the inflation)

econmic development is HDI, quality of life indicators (eg. literacy rate etc) and real GDP per capita income

? thx =]

 

[mattchan]

just want to comfirm that. ><

so

economic growth is the change in real GDP % (where real GDP is GDP take away the inflation)

econmic development is HDI, quality of life indicators (eg. literacy rate etc) and real GDP per capita income

? thx =]

Economic growth is the increase in production capacity of a country and is measured in change in real GDP annually (as you stated).

Economic development are improvements in the standard of living of the population and quality of life, that are not and cannot be given a financial value. It is commonly measured by the UN's HDI indicator.

Hope that helps.

 

[Sparcod]

GDP= Consumption +Govt Spending + Invest. + Net exports

Can someone confirm that, please!
I saw in the book that GDP is the total value of goods and services produced.

 

[drewgcn]

Sparcod, they are the same thing, just the first is broken down into smaller parts.

GDP = total value of goods and services produced in one year

So GDP = Consumption (domestic consumption of goods and services) + Govt spending (on domestic goods and services) + Investment (creation of capital goods etc.) + Net Exports (goods and services sent overseas - goods and services purchased from overseas).

 

[Sparcod]

Thanks. That makes sense now.