Economic Growth and Development

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ECONOMIC DEVELOPMENT AND GROWTH Economic development and growth may not be the same thing depending on how growth rate is affecting the country's socio-economic development. However important and well known theories of macro-economic suggest that if markets are left on their own, people will improve their socio-economic wellbeing automatically as the result of better economic growth rate of the country. In other words, financial liberalization automatically leads to socio-economic uplift as suggested by Solow growth model. This appears to be true when we consider the differences that exist in liberalized and non-liberalized countries today. Solow model suggests that the governments must focus on lifting of controls from the financial markets. It is a documented truth that liberalization yields good economic returns in the long run especially in the developing countries. If a country is seeking long term growth, it must take liberalization into account. Despite the earlier claims of losses due to liberalization, Data and research conducted after 2001 revealed that financial liberation was a healthy policy but it worked more effectively in the long run since it took time for changes to become a part of the entire economic infrastructure. Secondly it was also found that the extent to which long term growth can benefit from liberation depends on some other economic factors as well such as large scale macroeconomic instability. Pill & Pradhan (1997) explained that credit
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