Growth, development, and progress

Economic growth means a society is making more things and providing more services as time
goes on. We can measure it by looking at a country's total income, like GNI, GNP, or GDP. So, if
a country is producing more and making more money, it is experiencing economic growth.
Economic development is more than just growth. It involves big changes in how the economy
works. For example, it could mean going from a local economy where people mainly make
things for themselves to a more market-based economy where things are bought and sold. It
can also mean shifting from mostly farming to having more factories and services.
Both economic growth and economic development can go backwards. This means that after
experiencing growth or development, a society can go through a decline or regress. It's
important to know that progress in these areas doesn't always continue.

When we talk about economic growth and development, we can describe and measure them
without thinking about what's right or wrong. They are considered neutral concepts that focus
on how much a society produces and earns.
On the other hand, progress is not neutral. It's not just about making more money or having
more things. Progress looks at how growth and development affect the environment and if they
create more inequality. So, if economic growth or an increase in material well-being harms the
environment or makes social inequalities worse, it may not be seen as progress from an ethical
point of view.
To sum it up, economic growth means producing more things, while economic development
involves big changes in how the economy works. Both are neutral terms that don't consider
ethics. Progress, however, goes beyond numbers and looks at the broader impact on the
environment and social well-being. It highlights the need for a balance between economic
growth, fairness for all, and taking care of the environment

Determinants of economic change and development

Determinants of economic change and development are influenced by various factors and
dynamics-

• Factors of production: To produce things in an economy, we need certain resources like

land, labor (people working), capital (money and tools), and entrepreneurship (people
starting businesses). The more of these factors we have, the more we can produce.
• Technology and social institutions: Changes in technology (new inventions and ways of
doing things) and social institutions (how society is organized, including economic,
social, and political systems) play a big role in driving economic change and
development. They bring new ideas and ways of doing things that can improve the
economy.
 • Economic statics vs. comparative statics or dynamics: We can study the economy at a
specific moment in time (like taking a snapshot) or look at how it changes over time.
Looking at changes and trends helps us understand how the economy develops.
• Mix of population, resources, technology, and social institutions: Economic change and
development depend on how these different factors work together. It includes things
like the size and makeup of the population, the resources available, the technology we
have, and the rules and institutions that guide how the economy works. Each of these
factors has many different parts that affect economic outcomes.
• Technological innovation: New inventions and technological advancements have a big
impact on economic change and development. They can change how things are made,
create new industries, and make the economy more productive, leading to growth.
• Sociocultural context or institutional matrix: The values, beliefs, and social systems in a
society also play a role in economic change. They can provide stability, but they can also
be barriers to development if they restrict certain resources or ways of doing things due
to cultural or religious reasons.
• Marxist theory: According to Marxist theory, the way the economy is organized (called
the "mode of production") is the key to economic development. Other things like social
structures, the government, and dominant ideas are seen as secondary to how the
economy works.
• Institutionalist theory: Institutionalists believe that economic development comes from
a constant struggle between technological change and social institutions. They think
that new ideas and technology clash with existing social systems and institutions, which
can shape economic outcomes.

Overall, the relationship between institutions, technology, resources, and population is

complex and interconnected. It's not always easy to predict what will happen because many
factors interact and influence each other. Understanding these dynamics is important for
understanding how economies change and develop.

Production and productivity

Production is when we use things like land, labor (people working), money, and
entrepreneurship to make the things that people want and need.
Productivity is how well we use these resources to make things. It's like measuring how much
we get out compared to what we put in. When we look at the overall productivity of all the
resources together, we call it total factor productivity.
There are different factors that can make production more productive. For example, when
workers use machines or have good education and skills, they can get more done. One
important factor is human capital, which means the knowledge and skills people have from
learning and training. It's really important to invest in education and training because it helps
make production more efficient.
In recent years, productivity has improved a lot. This is because we have better technology,
smarter ways of organizing things, and we're investing more in education and training.
The law of diminishing returns tells us that when we add more and more of something, like
workers, to a limited amount of resources, the extra output we get will start to decrease. On
the other hand, economies of scale occur when we make more things. As we increase our
production and make a larger quantity of goods, the cost per unit goes down.
Understanding production and productivity helps us figure out how to make things better and
smarter. It shows us how important it is to invest in education and technology because they
help us get more out of what we have.

https://www.rba.gov.au/education/resources/explainers/productivity.html

Economic structure and structural change

Economic structure refers to how different parts of the economy, like farming, manufacturing,
and services, fit together. It's like how the pieces of a puzzle connect. The primary sector
includes activities where things are directly taken from nature, such as growing crops or
catching fish. The secondary sector is about changing or making things from natural resources,
like building houses or making products in factories. The tertiary sector is all about providing
services, such as healthcare, banking, or government help.

Activities like mining, transportation, and hunting are part of the primary sector because they
involve getting things directly from nature.

Structural change in the economy means that over time, the number of jobs and where people
make money can shift. It's like a dance where people move from one part of the economy to
another. People might move from farming to manufacturing, and then from manufacturing to
services. Changes in technology, like new machines, and changes in what people want can
cause these shifts.

These changes are usually driven by changes in how much things cost and how much people get
paid. When the prices or wages change in a certain area, it can affect where resources and
workers go. This applies to more than just shifts between sectors. It also includes other
economic changes, like when new industries become important and old ones aren't as popular
anymore.
As a general rule, people and resources like money and tools go where they can get the best
rewards. That means they go to the places that give higher prices or wages. Producers and
workers want to put their resources where they can make the most money.

Here are some examples of how economic structure can change over time:

• In the early 1800s, the United States was primarily an agricultural economy. Most
people lived on farms and grew their own food. However, as the Industrial Revolution
began, more and more people moved to cities to work in factories. By the late 1800s,
the United States had become a major industrial power.
• In the mid-20th century, the United States entered a period of economic growth known
as the "Golden Age." During this time, the service sector grew rapidly, and many new
industries were created. The United States also became a major exporter of goods and
services.
• In recent decades, the United States has experienced a period of economic
restructuring. The manufacturing sector has declined, while the service sector has
continued to grow. The United States has also become a major importer of goods and
services.

Economic structure is constantly changing, and it is important to understand how these

changes can affect people's lives. By understanding economic structure, we can better
understand the forces that shape our economy and make informed decisions about our future.

Logistics of economic growth

Logistics is about organizing and managing supplies and resources for a big group, like an army.
But it's also a math term that describes a curve called the S-curve. This curve is used by
biologists to show how populations grow, even for animals like fruit flies.
What's interesting is that this curve can also give us a rough idea of how human populations
grow. In history, when the population in Europe grew, it usually went along with economic
growth. That means more goods and services were produced, both overall and for each person.

To understand how population growth, income changes, and economic development are
connected, we need to look at some important factors. These factors are population size, the
resources available, technology, and social institutions.
Population size matters because more people can mean more production and consumption.
But it's not just about the number of people, it's also about the quality of the population, like
education and skills, which affect the economy.
Resources are another important factor. They can be natural resources, like land and minerals,
or things people make, like buildings and tools. Using and managing resources well helps the
economy grow.

Technology is a big driver of economic growth. When we have better technology, we can
produce things more efficiently. This means we can make more goods and services using fewer
resources.
Social institutions, like laws, government systems, and cultural norms, also play a role in
economic development. These institutions create rules and provide a framework for economic
activities, like property rights and how markets work.
To understand how population growth, income changes, and economic development are
connected, we need to see how these factors work together. Changes in population, resources,
technology, and social institutions can shape how the economy grows and affect the well-being
of societies.
Understanding the logistics of economic growth helps us see how all these factors are related
and how they affect economic development. By studying these relationships, policymakers and
researchers can make better decisions to promote sustainable and fair economic progress