ECONOMICS: CHAPTER – 2: GROWTH, DEVELOPMENT AND HAPPINESS
When the National Income increases (growth), ideally it should result in development (qualitative aspect – like health, education, employment etc.)
Growth generates employment and employment generates further growth. Economic development should indeed be to maximize the happiness and wellbeing of current and future generations. Economic development should indeed be to maximize the happiness and wellbeing of current and future generations.
Process is a general term to denote betterment or improvement in anything. In economics, the term was used for a long time to show the positive movement in the lives of people and in an economy.
3. Economic Growth
Economic growth is an increase in the production of goods and services over a specific period. To be most accurate, the measurement must remove the effects of inflation.
Gross Domestic Product is the best way to measure economic growth. It takes into account the country's entire economic output. It includes all goods and services that businesses in the country produce for sale. It doesn't matter whether they are sold domestically or overseas.
It also say that economic growth is a quantitative progress.
Examples of economic growth:
a. An economy might have been able to see growth in food production during a decade which could be measured in tonnes.
b. Per capital income for an economy might be measured in monetary terms over a period.
4. Economic Developments
In economy, development indicates the quality of life in the economy, which might be seen in accordance with the availability of many variables such as:
The level of nutrition
The expansion and reach of healthcare facilities- hospitals, medicines, safe drinking water etc.
The level of education
Other variables on which the quality of life depends
Higher economic development requires higher economic growth.
Economic development is quantitative as well as qualitative progress in an economy.
A. Measuring Development-
It’s able to articulate the differences between growth and development, the measuring development method will be used.
It was an established fact that the goal of progress goes beyond the were ‘increase in income’.
B. Human Development Index-
The United Nations Development Programme (UNDP) published its first Human Development Report (HDR) under led by Mahbub-ul-Haq and Inge kaul in 1990.
The report had a human development index which was the first attempt to define and measure the level of development of economies.
The Human development index measures development by combining three indicators- Health, Education and Standard of living converted into a composite HDI.
Whenever economists from the outset talked about progress they meant overall happiness of human life.
Social scientists, somehow have been using terms such as progress, growth, development, well-being, welfare as synonyms of ‘happiness’. Happiness is a normative concept as well as state.
The period in which development was defined, it was considered that with the supply of some selected material resources human life can be improved. This resources were pin-pointed as, a better level of income, proper level of nutrition, healthcare facilities, proper level of literacy and education, etc.
A. Gross National Happiness-
Somehow a very small Kingdom had been able to define development in its own way, which included material as well as non-material aspects of life and named it the Gross National Happiness (GNH).
Bhutan, a small Himalayan Kingdom developed a new concept of assessing development in the early 1970s - the Gross National Happiness (GNH).
Bhutan has been following the GNH which has the following parameters to attain happiness:
Higher real per capita income
Happiness differs systematically across societies and over time, for reasons that are identifiable, and even alterable through the ways in which public policies are designed and delivered.
Raising income can raise happiness, especially in poor societies, but fostering cooperation and community can do even more, especially in rich societies that have a low marginal utility of income.