Economic growth refers to a sustained increase in national income. It is the problem of developed countries.

Economic development refers to the GDP growth withinfrastructural development. It is the problem of underdeveloped
or developing countries.

Economic Growth
Definition: Increase in the production of goods and services in an economy over time.
Measurement: Usually measured by the increase in GDP (Gross Domestic Product).
Focus: Quantitative aspect; focuses on numbers and outputs.

Economic Development
Definition: Broader improvement in living standards, including better education, healthcare, and income equality.
Measurement: Considered through various indicators such as HDI (Human Development Index), literacy rates, life
expectancy, etc.
Focus: Qualitative aspect; focuses on overall well-being and quality of life.

Topic:Obstacles to Economic Development

1. Vicious cycles of poverty
2. Low rate of capital formation
3. Socio-cultural constraints
4. Agricultural constraints
5. Human resource constraints
6. Foreign exchange constraints
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1. Vicious cycles of poverty: This is where poverty perpetuates itself. Families in poverty can't afford education
or healthcare, which limits their opportunities, keeping them in poverty.
2. Low rate of capital formation: With limited savings and investments, there's less money available for
businesses to grow. Without capital, economic growth is stunted.
3. Socio-cultural constraints: Certain social norms or traditions can limit economic development. This includes
things like discrimination, resistance to change, or lack of emphasis on education.
4. Agricultural constraints: Poor farming techniques, lack of irrigation, and over-reliance on a single crop can all
hurt agricultural productivity, which is crucial for many developing economies.
5. Human resource constraints: This refers to low levels of education and skills in the workforce. Without a
skilled labor force, it's hard for an economy to develop.
6. Foreign exchange constraints: When a country doesn't have enough foreign currency, it can’t buy the
imports it needs or pay off international debts, limiting its growth potential.

SIMPLER
1. Vicious cycles of poverty: Poor people stay poor because they can’t afford education or healthcare, keeping
them from improving their situation.
2. Low rate of capital formation: There isn't enough money being saved and invested for businesses to grow.
3. Socio-cultural constraints: Social traditions or norms can limit progress, like discrimination or resistance to
new ideas.
 4. Agricultural constraints: Farming struggles because of poor techniques, lack of water, or reliance on just one
type of crop.
5. Human resource constraints: Not enough people have the education and skills needed for the economy to
grow.
6. Foreign exchange constraints: There’s not enough foreign money to buy what the country needs from other
countries.
Topic:Physical quality life index (PQLI):
SIMPLER
"Physical quality life index (PQLI):Three component indicators
a) Infant mortality: 9 – 229
b) Life expectancy : 38 – 77
c) Basic literacy rate: 0 – 100

PQLI index scaled from 0 – 100- Zero (0) represents worst performance- 100 represents best performance

1. Infant mortality: This measures the number of infant deaths per 1,000 live births, ranging from 9 (low) to 229
(high). Lower numbers are better.
2. Life expectancy: This is how many years, on average, people are expected to live, ranging from 38 (low) to
77 (high). Higher numbers are better.
3. Basic literacy rate: This shows the percentage of people who can read and write, ranging from 0% to 100%.
Higher percentages are better.
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The PQLI uses these three indicators to create a scale from 0 to 100, where 0 represents the worst possible conditions
(high infant mortality, low life expectancy, low literacy) and 100 represents the best (low infant mortality, high life
expectancy, high literacy). It gives a quick snapshot of the overall quality of life in a country.

Topic: Human Development Index(HDI):

SIMPLER
It is a composite index of three social indicators

a) Life expectancy
b) Adult literacy
c) Years of schooling

The HDI value of a country is calculated by taking three indicators

a) Longevity: 25 – 85
b) Educational attainment: 0 – 100
c) Decent standard of living: $100 - $40000

0 < HDI < 1 HDI Rank:

a) Below 0.5: low level
b) 0.5 – 0.8 : Medium level
c) Above 0.8: High level

Human Development Index (HDI) is a measure of a country's overall achievement in three basic aspects of
human development:
a. Life expectancy: This reflects the average number of years a person can expect to live. A higher life
expectancy means better health and living conditions.
b. Adult literacy and years of schooling: This measures the education level of a country's population. Higher
scores here indicate better educational systems and more access to education.
c. Decent standard of living: This is represented by Gross National Income (GNI) per capita, which shows the
average income of a country's citizens. Higher income means better living standards.

Calculation of HDI:
a. Longevity (Life expectancy): The range is from 25 to 85 years.
b. Educational attainment: This combines adult literacy rates and years of schooling, on a scale from 0 to 100.
c. Standard of living: Measured by income, ranging from $100 to $40,000.

The HDI value is a number between 0 and 1:

Below 0.5: Low human development.

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0.5 – 0.8: Medium human development.

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Above 0.8: High human development.

This index provides a composite measure to compare the well-being and quality of life across different countries,
considering not just economic wealth, but also health and education.

Topic: Factors of Economic Growth

• Economic Factors:
1. Natural resources
2. Capital accumulation
3. Organization
4. Technological progress
5. Division of labor and scale of production
6. Structural change

• Non-economic Factors:
1. Social factors
2. Human factor
3. Political and administrative factor

Economic Factors
 1. Natural resources: Availability of land, minerals, forests, etc., that can be used to produce goods.
2. Capital accumulation: Investment in machinery, buildings, and infrastructure that help increase production.
3. Organization: Efficient management and coordination of resources and labor.
4. Technological progress: Innovations and advancements in technology that make production more efficient.
5. Division of labor and scale of production: Specialization of tasks and large-scale production that lead to
efficiency and increased output.
6. Structural change: Shifts in the economic structure, such as moving from agriculture to manufacturing,
which can lead to growth.

Non-economic Factors
1. Social factors: Cultural attitudes, values, and social norms that can influence economic activities and
growth.
2. Human factor: Education, skills, and health of the workforce, which are crucial for productivity.
3. Political and administrative factors: Stability, good governance, and effective policies that create a conducive
environment for economic growth.

SIMPLER
Economic Factors
1. Natural resources: Stuff like land, minerals, and forests that we use to make goods.
2. Capital accumulation: Money invested in things like machines and buildings to produce more stuff.
3. Organization: How well we manage resources and workers.
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4. Technological progress: New tech and inventions that make production faster and cheaper.
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5. Division of labor and scale of production: Splitting tasks among workers and producing things in large
quantities for efficiency.
6. Structural change: Moving from farming to manufacturing, for example, to boost growth.

Non-economic Factors
1. Social factors: Cultural attitudes and social norms that affect economic activities.
2. Human factor: Education, skills, and health of the workforce.
3. Political and administrative factors: Stable government, good policies, and effective governance that support
economic growth.

Topic: Economic Growth and Income Distribution

• Kuznets Hypothesis:
In the early stages of economic growth relative income
inequality increases, stabilizes for a time and then decline in
the later stages. This is known as the inverted U-shaped
hypothesis of income distribution.
Gini coefficient of distribution is a better measure of the
degree of income inequality.
0<G<1
o = means complete equality
1 = means complete inequality

SIMPLER
Kuznets Hypothesis

Early stages: Economic growth starts, and inequality increases.

Middle stages: Inequality stabilizes (levels off).
Later stages: Continued growth leads to less inequality.

Picture an inverted "U" shape.

Gini Coefficient : Measures income inequality.

0: Complete equality (everyone has the same income).

1: Complete inequality (one person has all the income).

Most countries fall somewhere between these values.

So, Kuznets says inequality can get worse before it gets better, and the Gini coefficient helps us measure this inequality.
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Topic: Causes of increase in income inequality with development

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1. Transition
2. Capital intensive technique
3. Migration
4. Technological advancement
5. Financial facilities
6. Urban bias
7. Political reasons
8. Population growth

1. Transition: When an economy shifts from agriculture to industry, those who adapt quickly get richer, while
others lag behind.
2. Capital intensive technique: Industries that need heavy investment in machinery often benefit the wealthy
who can afford to invest.
3. Migration: People moving from rural areas to cities can face initial hardship, while city dwellers are already
benefiting from development.
4. Technological advancement: New tech can increase productivity and income for some, but leave behind
those who can’t access or use it.
5. Financial facilities: Access to banking and credit helps some people grow their wealth, but others might not
have the same access.
 6. Urban bias: Development often focuses on cities, leaving rural areas underdeveloped.
7. Political reasons: Policies and governance can favor certain groups, leading to unequal distribution of
resources.
8. Population growth: Rapid population growth can strain resources, benefiting a few while many struggle.

SIMPLER
1. Transition: Moving from farming to industry makes some people richer faster.
2. Capital intensive technique: Businesses needing expensive machines benefit the wealthy.
3. Migration: People moving to cities often struggle at first, while city residents benefit.
4. Technological advancement: New technology helps some get richer, others fall behind.
5. Financial facilities: Those with access to banks and credit can grow wealth faster.
6. Urban bias: Cities get more development, leaving rural areas behind.
7. Political reasons: Government policies can favor certain groups.
8. Population growth: More people can strain resources, making it harder for some to get ahead.

Topic: Causes of reduction in income inequality with development

Two reasons:
1. The per-capita income of the highest income group falls
2. The per-capita income of the lowest income group rises
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1.The richest get a bit less rich: Their average income decreases.
2.The poorest get a bit richer: Their average income increases.

When these two things happen together, income inequality decreases because the gap between the richest and the
poorest gets smaller. So, economic growth can sometimes help balance things out if it benefits the poorer segments more,
and if the income of the richest stabilizes or even declines a bit.

SIMPLER
1. Richest earn a bit less.
2. Poorest earn a bit more.
When these happen, the gap between rich and poor shrinks. Simple as that.

Topic: Modern Economic Growth

Definition: This refers to how countries like those in Western Europe, the US, Canada, Australia, and Japan developed
and grew
.
Characteristics:
1. High growth rate
2. Rise in productivity
3. High rate of structural transformation
4. Urbanization
5. Outward expansion
6. International flows of men, goods and capital

Characteristics:
1. High growth rate: The economy grows quickly, creating more wealth.
2. Rise in productivity: Workers and industries become more efficient and produce more goods and services.
3. High rate of structural transformation: The economy changes from being focused on farming to industries
and services.
4. Urbanization: More people move from rural areas to cities.
5. Outward expansion: Countries expand their markets and businesses beyond their borders.
6. International flows of men, goods, and capital: There is a lot of movement of people, trade, and investment
across countries.

SIMPLER
Characteristics:
1. Fast growth: Economies grew quickly.
2. More productivity: Workers produced more stuff.
3. Big changes: Shift from farming to industry and services.
4. Urbanization: People moved to cities.
5. Expansion: Countries did business outside their borders.
6. International trade and movement: People, goods, and money moved between countries.
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Topic: Sustainable Development (Objectives)

1. Creation of sustainable improvements
2. Lifting living standards
3. Max. net benefits
4. Strong sustainability
5. Weak sustainability
6. Accelerating economic development

Sustainable development means growth that lasts over time and doesn’t harm future generations.
Objectives:
1. Creation of sustainable improvements: Making long-term positive changes that can be maintained.
2. Lifting living standards: Improving the quality of life for everyone, not just economically, but also in health,
education, and equality.
3. Maximizing net benefits: Ensuring the overall gains (economic, social, environmental) are greater than the
costs.
4. Strong sustainability: Protecting the environment strictly to ensure natural resources aren’t depleted.
5. Weak sustainability: Balancing resource use with environmental preservation, allowing some trade-offs as
long as the overall resource base isn't reduced.
 6. Accelerating economic development: Speeding up economic growth in a way that can be sustained over
time.

SIMPLER
1. Long-term improvements: Make changes that last.
2. Better living standards: Improve quality of life for everyone.
3. Maximize benefits: Ensure the good stuff outweighs the bad.
4. Strong sustainability: Protect the environment strictly.
5. Weak sustainability: Balance resource use and environmental protection.
6. Faster growth: Speed up economic growth sustainably.
This way, we create a world where everyone’s needs are met now and in the future.

Topic: Environmental Problems arise with ED

1. Air pollution
2. Water pollution
3. Solid and hazardous wastes
4. Deforestation
5. Soil degradation
6. Loss of bio-diversity

Environmental Problems with Economic Development

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1. Air pollution: Factories and cars release harmful gases, causing smog and health issues.
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2. Water pollution: Industrial waste and chemicals pollute rivers and lakes, harming wildlife and making water
unsafe to drink.
3. Solid and hazardous wastes: Increased production leads to more garbage, including dangerous materials
that can contaminate soil and water.
4. Deforestation: Forests are cut down for agriculture and development, leading to loss of trees and wildlife
habitats.
5. Soil degradation: Over-farming and use of chemicals reduce soil quality, making it less fertile.
6. Loss of biodiversity: Natural habitats are destroyed, leading to the extinction of plants and animals.
Each of these issues arises as economies grow, highlighting the need for sustainable practices to protect the
environment.
SIMPLER:
1. Air pollution: Factories and cars make dirty air.
2. Water pollution: Factories dump waste into rivers and lakes.
3. Solid and hazardous wastes: More trash, including dangerous stuff.
4. Deforestation: Cutting down trees for farms and buildings.
5. Soil degradation: Bad farming practices ruin soil.
6. Loss of biodiversity: Destroying habitats makes plants and animals disappear.

Topic: Causes of Environmental Degradation

1. Population growth
2. Poverty
3. Agricultural development
4. Industrialization
5. Transport development
6. Urbanization
7. Foreign indebtedness
8. Market failure

1. Population growth: More people need more resources, leading to more waste and environmental stress.
2. Poverty: Poor communities may rely on practices that harm the environment, like cutting down trees for fuel.
3. Agricultural development: Expanding farmland can lead to deforestation and overuse of chemicals.
4. Industrialization: Factories and industrial processes often pollute air and water.
5. Transport development: Building more roads and increasing vehicle use leads to more emissions and land
use changes.
6. Urbanization: Cities grow, consuming more land and producing more waste.
7. Foreign indebtedness: Countries might exploit their natural resources to pay off debts, causing
environmental harm.
8. Market failure: When markets don’t account for environmental damage, businesses may pollute and
degrade the environment without penalty.

These factors all contribute to environmental degradation as economies and societies grow. Clear enough?
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SIMPLER:
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1. More people: Need more resources and cause more waste.

2. Poverty: Poor people may harm the environment to survive.
3. More farming: Can lead to cutting down trees and using too many chemicals.
4. Factories: Pollute air and water.
5. More roads and cars: Lead to more pollution and use up land.
6. Bigger cities: Use more land and create more waste.
7. Debt: Countries might exploit their resources to pay off debts.
8. Market problems: Businesses might harm the environment because they don’t face penalties.

Topic: Policies for Sustainable development

1. Reducing poverty
2. Removing subsidies
3. Clarifying and extending property rights
4. Market based approaches
5. Regulatory policies
6. Economic incentives
7. Trade policy
8. Public participation
9. Participation in global environmental efforts
1. Reducing poverty: Helping the poorest people to improve their quality of life and access to resources.
2. Removing subsidies: Eliminating financial support that encourages harmful environmental practices.
3. Clarifying and extending property rights: Ensuring people and businesses have clear ownership, which encourages
better resource management.
4. Market based approaches: Using market signals like carbon pricing to encourage sustainable practices.
5. Regulatory policies: Setting rules and standards that protect the environment.
6. Economic incentives: Providing benefits for those who adopt sustainable practices, like tax breaks or subsidies for
green energy.
7. Trade policy: Promoting fair and sustainable trade practices that don’t harm the environment.
8. Public participation: Engaging communities in decision-making processes to ensure that development meets their
needs and is sustainable.
9. Participation in global environmental efforts: Working with other countries to address global environmental issues like
climate change.

These policies aim to create a balanced approach to development, ensuring that economic growth doesn't come at the
expense of the environment or future generations.

SIMPLER
1. Reduce poverty: Help poor people have better lives.
2. Remove subsidies: Stop financial support for harmful practices.
3. Property rights: Make sure people own and care for resources.
4. Market approaches: Use prices and markets to encourage good practices.
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5. Regulations: Set rules to protect the environment.

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6. Economic incentives: Reward people and businesses for being green.

7. Trade policy: Promote eco-friendly trading.
8. Public participation: Get communities involved in decision-making.
9. Global efforts: Work with other countries on global issues.

Topic: Measuring Sustainable development

1. Measuring natural capital stock
2. Natural resource or green accounting
3. Measuring environmental values:
a) Market prices
b) Cost of replacement
c) Surrogate market
d) Surveys
4. Social discount rate

1. Measuring natural capital stock: Assessing the value of natural resources like forests, minerals, and water.

2. Natural resource or green accounting: Tracking the use and depletion of natural resources in economic accounts, to
see how they affect the economy.
3. Measuring environmental values:
a. Market prices: Using the selling price of natural resources.
b. Cost of replacement: Estimating the cost to replace a natural resource if it's used up.
c. Surrogate market: Using prices from related markets to estimate the value of a resource.
d. Surveys: Asking people how much they value certain environmental goods and services.

4. Social discount rate: A method to evaluate the current value of future benefits from sustainable practices. It helps in
deciding if long-term projects are worth it.

SIMPLER
1. Natural capital stock: Count our natural resources like forests and water.
2. Green accounting: Track how much we use up and its effect on the economy.
3. Environmental values:

a. Market prices: Use the selling price of natural resources.

b. Cost of replacement: How much it costs to replace a resource.
c. Surrogate market: Use prices from similar markets.
d. Surveys: Ask people how much they value the environment.

4. Social discount rate: Decide the current value of future benefits.

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These help us measure the impact of development on the environment. Easy peasy!
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Topic: Sustainable Development Goals (SDG)

1. End Poverty in All Its Forms Everywhere
2. End Hunger, Achieve Food Security and Improved Nutrition and Promote Sustainable Agriculture
3. Ensure Healthy Lives & Promote Well-Being for All at All Ages
4. Ensure Inclusive & Equitable Quality Education & Promote
Life-Long Learning Opportunities for All
5. Achieve Gender Equality & Empower All Women & Girls
6. Ensure Availability & Sustainable Management of Water & Sanitation for All
7. Ensure Access to Affordable, Reliable, Sustainable & Modern Energy for All
8. Promote Sustained Inclusive & Sustainable Economic Growth, Full & Productive Employment & Decent Work for All
9. Build Resilient Infrastructure, Promote Inclusive & Sustainable Industrialization & Foster Innovation
10. Reduce Inequality Within & Among Countries
11. Make Cities & Human Settlements Inclusive, Safe, Resilient & Sustainable
12. Ensure Sustainable Consumption & Production Patterns
13. Take Urgent Action to Combat Climate Change & Its Impacts
14. Conserve & Sustainably Use the Oceans, Seas & Marine Resources for Sustainable Development
15. Protect, Restore and Promote Sustainable Use of Terrestrial Ecosystems, Sustainable Manage Forests, Combat
Desertification, and Halt and Reverse Land Degradation and Halt Biodiversity Loss
16. Promote Peaceful and Inclusive Societies for Sustainable Development, Provide Access to Justice for All and
Build Effective, Accountable and Inclusive Institutions at All Levels
17. Strengthen the Means of Implementation and Revitalize the
Global Partnership for Sustainable Development

SIMPLER
1. End poverty: Make sure no one is extremely poor.
2. End hunger: Ensure everyone has enough food and good nutrition.
3. Healthy lives: Ensure people of all ages are healthy and well.
4. Quality education: Provide good education for all and encourage lifelong learning.
5. Gender equality: Ensure equal rights and opportunities for women and girls.
6. Water and sanitation: Ensure everyone has access to clean water and sanitation.
7. Modern energy: Ensure everyone has access to reliable and sustainable energy.
8. Economic growth: Promote sustainable economic growth and decent jobs.
9. Infrastructure and innovation: Build resilient infrastructure and promote innovation.
10. Reduce inequality: Reduce inequality within and between countries.
11. Sustainable cities: Make cities safe, inclusive, and sustainable.
12. Responsible consumption: Promote sustainable consumption and production.
13. Combat climate change: Take action against climate change and its effects.
14. Life below water: Protect oceans and marine resources.
15. Life on land: Protect and restore land ecosystems and biodiversity.
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16. Peace and justice: Promote peace, justice, and strong institutions.
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17. Global partnership: Strengthen global partnerships for sustainable development.