Asian Tigers and Macroeconomics | Assignment

Running head: ASIAN TIGERS AND MACROECONOMICS
ASIAN TIGERS AND MACROECONOMICS
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ASIAN TIGERS AND MACROECONOMICS1
Table of Contents
Answer to question 1:.................................................................................................................2
Part a:.....................................................................................................................................2
Part b:.....................................................................................................................................3
Answer to question 2:.................................................................................................................4
Answer to question 3:.................................................................................................................6
References..................................................................................................................................7

ASIAN TIGERS AND MACROECONOMICS2
Answer to question 1:
Part a:
Economic growth and economic development are claimed to be contrasting topics.
Economic growth indicates the growth of the economy in terms of monetary values and
economic wealth in a particular area of a specific year (Jorgenson and Vu 2013). The GDP
growth of the Asian Tigers is high, which attracts huge volumes of investments into the
country. As a result, the business sector is well developed in this region. On the other hand,
economic development is the alleviation of the social indicators of the economy that denotes
the welfare of the community as a whole. The average Human Development Index (HDI) of
this region is above 0.8, which indicates higher HDI (Bandiera and Natraj 2013). This implies
that the region has not only increased its business but also the welfare of the people. An
increase in economic growth does not imply an increase in economic development. Economic
growth is required to induce business activity and promote investments. Higher the rate of
growth greater is the profitability level of the economy. On the other hand, economic
development implies lower poverty rates, a higher level of education, lower mortality rates
and proper access to sanitation facilities. Similarly, the rate of growth of GDP is not equal to
the rate of growth of HDI. Thus, economists claim these two topics are different from one
another.
Differences and similarities: Economic growth denotes quantitative changes in the
economy. On the other hand, both qualitative changes and quantitative aspects can be brought
by economic development (Hanushek 2013). Growth is targeted at increasing the wealth and
output of the economy. The indicator to denote the economic growth of a country is the Gross
Domestic Product (GDP) or Gross National Product (GNP). Moreover, economic growth
indicates short-term changes and is subject to variation each year. In contrast to this,