Economic growth and economic development 35

Introduction to Modern Economic Growth
in Figure 1.9 above. In particular, since gt,t−1 ' ln yt − ln yt−1 , equation (1.1) can
be written as

ln yt ' (1 + β) ln yt−1 + εt .
Figure 1.9 showed that the relationship between log GDP per worker in 2000 and
log GDP per worker in 1960 can be approximated by the 45◦ line, so that in terms
of this equation, β should be approximately equal to 0. This is confirmed by Figure
1.14, which depicts the relationship between the (geometric) average growth rate
between 1960 and 2000 and log GDP per worker in 1960. This figure reiterates
that there is no “unconditional” convergence for the entire world over the postwar

.06

period.

HKG
KOR

.04

THA

annual growth rate 1960-2000
0
.02

CHN

JPN
MUS

MYS

ROM

PAK
IND

COG

NPL

GNB
UGA
BFA

TZA

ETH

CPV

LKA
BGD

PAN

IRN CHL
TTO
MEX
JOR

ECU GTM
CIV
PHL
GMB
ZAF
URY
PRY
KEN
GHA
COL
SLV
CRI
BEN
GIN
HND
CMR
TGO
JAM
RWA
PER
BOL
COM
SEN
TCD
MOZ
MDG
ZMB
MLI
NER
NGA

NIC
ZWE

LUX

ISL
GBRDNK USA
NLD
SWE
AUS
CAN
CHE
ARG

NZL

VEN

-.02

BDI

PRT
BRB
ESP
GRC
AUT
ITA
SYR
FIN

GAB
TUR
ISR
BEL
FRA
EGYDOM BRA
NOR
MAR
SYC

IDN

LSO
MWI

IRL

6

7

8
9
log gdp per worker 1960

10

Figure 1.14. Annual growth rate of GDP per worker between 1960
and 2000 versus log GDP per worker in 1960 for the entire world.
21