Interests in the study of economic growth and development have been on the increase especially since the middle of the present century. Economic growth results in the expansion of a country’s production possibility curve such that the potential output of the country is increased beyond the previous levels. Thus growth is often defined in terms of a sustained increase in the real per capita income of a country. Simon Kuznets in (Todaro, 1885), defined a country’s economic growth as “a long term rise in the capacity to supply increasingly diverse economic goods to its population, this growing capacity based on advanced technology and the institutional and ideological adjustments that it demands”. Growth is therefore measurable and objective. It describes expansion in capital, in the labour force, in output, income, consumption e.t.c.
It should be noted that economic growth is sometimes used interchangeably with economic development. A distinction of the two was however made by (Jhingan, 1976) where he defined economic development as the ‘non-quantifiable measure of the growing economy” i.e. the economic, social and other changes that lead to growth such as changes in techniques of production, social attitudes and institutions e.t.c. No matter the distinction what is important in the words of (Iyoha, 1996) is that there is no development without growth. One point that must be mentioned however is that in practice, economic growth is used to describe the process of growth in advanced industrialized countries while economic development is used to describe the dynamics of growth in low income non-industrialized countries. This position is buttressed by (Romer, 2001), where he posited that over the past few centuries, standard of living in industrialized countries has reached levels almost unimaginable to their ancestors. He affirmed that although comparisons are difficult, the best available evidence suggests that average real income today in...
Please join StudyMode to read the full document