Economic growth may be a result of all idle resources being employed as resulted from an increase in aggregate demand.
Economic growth can easily become uneven because some industries may grow much quicker than others; so more resources will the allocated towards these industries. In addition to that, the industries that are not growing at such a rapid rate relative to others will have a chance of being neglected. Economic growth is usually associated with negative externalities, eg. Environmental damage, an inequality in the distribution of income.
Economic Development is a more comprehensive measure than economic growth. Economic development is an increase in the real GDP per capita as well as the welfare of the nation (improving material and non-material standards of living). Economic development focuses on the quality. Economic development occurs when the costs of growth are minimised, and the benefits of growth are distributed among the whole population.
Both economic growth and economic development is aimed at measuring the amount of growth in the economy and how it leads to development.
An increased income is spread evenly over the population; this will allow more purchasing power, increased revenue for the government, and a higher standard of living.
When economic growth occurs in LDCs, this may inequality in the distribution of income because some industries may grow more rapidly than others, therefore the people associated with these industries incomes will also rise more quickly than people of other industries. But economic development is aimed at the whole nation’s income rising.
Economic development is the ultimate goal.
