Objectives of Economic Growth and Development Essay

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Objectives of Economic Growth and Development

Economic growth is defined by, among other things, material capital formation, human capital formation and the creation of innovation. Put another way, economic growth is determined by the amounts and types of capital and labor that are invested, and how they are utilized for production. The objective of economic growth through economic policy is not necessarily GDP or GNP maximization but maybe enhancing and improving quality of life or other values that cannot be measured by GDP. If we limit our outlook to economic growth itself, the questions of what to assume as the objective of economic growth and how to measure it is decided by people. It is possible and desirable, to have a scheme
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By integrating with the larger global economy, a nation hopes to increase trade that drives productivity change and income growth. Unfortunately, this explanation relies on a dependency of a particular economy to be logistically connected to the global economy. In other words, trade must have some way of getting to and from the developing economy.

The second view emphasizes the role of quality institutions, or rather the lack thereof, as the reason for low economic growth and development. According to Daron Acemoglu, a proponent of this view, some societies have good institutions that encourage investment in machinery, human capital, and better technologies, and, consequently, these countries achieve economic prosperity. In other words, economic development and growth are products of good institutions. Concentrate on establishing good institutions and economic growth and development will follow.

The final view revolves around the geography of a nation and economy, specifically its resource constraints and physical location, which can impact transportation costs, technological productivity and disease, all that directly influence its ability to integrate with the larger global economy. Economists such as Jeffrey Sachs argue that the role of geography in the growth and development of an economy is often underestimated as an explanation for poverty stricken nations. The geography view emphasizes the need for struggling economies to receive…

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