Economic growth and economic development 26

10

Introduction to Modern Economic Growth

UK

South Korea
Spain

Brazil

Singapore
Guatemala
Botswana

India

7

log gdp per capita
8

9

USA

6

Nigeria

1960

1970

1980
year

1990

2000

Figure 1.8. The evolution of income per capita in the United States,
United Kingdom, Spain, Singapore, Brazil, Guatemala, South Korea,
Botswana, Nigeria and India, 1960-2000.
we will see that there is a lot of truth to this simple calculation; see Figures 1.8,
1.11 and 1.13).
In fact, even in the historically-brief postwar era, we see tremendous differences
in growth rates across countries. This is shown in Figure 1.7 for the postwar era,
which plots the density of growth rates across countries in 1960, 1980 and 2000. The
growth rate in 1960 refers to the (geometric) average of the growth rate between
1950 and 1969, the growth rate in 1980 refers to the average growth rate between
1970 and 1989 and 2000 refers to the average between 1990 and 2000 (in all cases
subject to data availability; all data from Penn World tables). Figure 1.7 shows
that in each time interval, there is considerable variability in growth rates; the
cross-country distribution stretches from negative growth rates to average growth
rates as high as 10% a year.
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