Assignment on Economic Policy and Analysis

Running head: ECONOMIC POLICY AND ANALYSIS
Economic Policy and Analysis
Name of the Student
Name of the University
Author Note

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Table of Contents
Answer to question 1 (a)..................................................................................................................2
Answer to question 1 (b)..................................................................................................................6
Reference list.................................................................................................................................11

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Answer to question 1 (a)
Introduction
The paper is aimed at explaining that economic growth is necessary but not essential
criteria for the economic growth. Growth reflects the return on capital investment, whereas,
development is regarded as the sustainable consumption of the economic resources. The
development is concerned for maintaining the ecological balance. The quality of life style and
real income are the core factors to examine the degree of the economic development. It is
observed that that economic growth not only depends on GDP also on other important
macroeconomic variables. The role of the macroeconomic variables leads the economy to a
sustainable growth. Different types of growth theories have been developed analyzing the
experiences of different countries on the economic growth and development. The concept of the
growth theory has been kept modifying in accordance with growth pattern of different countries.
The growth of the developed countries is relatively driven by the capital accumulation process
(Derunova et al. 2014). Meanwhile, the matured growth rate does not exist for a long-term. In
this regard, economists attain to develop a sustainable development concept focusing on the
development of the endogenous economic variables. The insight view of the development theory
is that the cumulative impact of the education and healthy life style leads to the significant
improvement in the economy.
Definition of the economic indicators of economic growth and economic development
Economic growth is regarded as the increase of the Gross Domestic Product (GDP). In
general, it is the reflection of the economic health. GDP stands for the cumulative output of the
country. GDP is measured as a monetary value of the products and services produced within a
geographical area with respect to a specific time period. Economic growth needs to be inclusive

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in order to support the sustainable growth of the country. The development of each
macroeconomic variable is important to sustain the economic growth. Human capital, literacy
rate, structural development and falling mortality rate are observed to work as a driving force for
the economic progress. A lot of countries face failure due to lack of the deficiency in the
supportive structure. If people are not properly educated, the technological innovation will not be
effective for the country. According to Kung and Schmid (2015), the benefit of the technological
innovation is possible to be realized if it improves the skill of the workforce. The people should
be acknowledged about the technical process of the machines implemented in the factory. In this
way, both the production in terms of the human capital and physical capital will be improved.
The introduction of Human Development Index is the reflection of the sustainable
development of the economy. This model does not consider the intrinsic value of the personal
choices and preferences. Cumulative progress is the optimum objective of the economic
development. A standard lifestyle depends on the economic growth, literacy rate, poverty
reduction and life expectancy rate (Kunze 2014). The multidimensional improvement supports
the growth of the economic endowments on the sustainable basis (Ju, Lin and Wang 2015). The
role of the human capital is unavoidable to gain a sustainable economic development. It leads to
the optimum consumption level of the environmental resources with the help of the efficient
manpower and technological innovation (Dietz and Stern 2015).
Evidence suggest that economic growth is necessary but not sufficient for economic
development
A several numbers of research papers have been developed to support the significant
importance of the economic development. According to the statement, economic growth is
essential but not sufficient condition for the economic growth. This is a popular debatable topic
for the economists. The first and foremost criterion for the sustainable development is the