- The time it takes a quantity to double
- Example: If real GDP per capita is growing at an annual growth rate of 3.5%, it will double in:
-
- As the table shows, small changes in the growth rate → large changes over time.
Two Growth Miracles - Two Growth Miracles
- Japan: annual rate of real growth1950-70 = 8.5%
- South Korea: annual rate of real growth1950-70 = 7.2%
- Two Growth Disasters
- Argentina
- 1900: one of the richest countries in the world
- Now: per capita real GDP is 1/3 that of the U.S.
- Nigeria
- Has barely grown since 1950
- Poorer now than it was in 1974
- Growth Miracles and Growth Disasters
Bad News - Bad News
- Most of the world is poor.
- More than a billion people live on less than $2 a day.
- Good News
- Relatively recent economic growth (since 1900) dramatically raised the standard of living of most people in developed nations.
- Korea was as poor as Nigeria 1950.
- There is no reason that currently poor countries cannot achieve similar results.
Check Yourself - According to Figure 7.2 (Slide 6) , approximately what percentage of the world’s population lived in China in 2000?
- If you earn 5% on your savings in a bank account, how many years will it take for your savings to double? How about if you make 8%?
- In figure 7.4, (slide 12) when did Japan’s real GDP per capita cross the $10,000 barrier? What was Japan’s growth rate in that time span?
- Understanding the Wealth of Nations
Do'stlaringiz bilan baham: |
