chapter thirty-two: how economies grow and develop
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Chapter Thirty-Two:
How Economies Grow and Develop
Development and Economic Growth
Infl
atio
n r
ate
(π)
Output (Y )
AS0 AS1
Expanded maximum capacity
AD0
AD1
Figure 32.1: Economic Growth in the AS/AD Model
Bolivia 0.5%
Brazil 1.0%
Chile 3.2%
Colombia 1.6%
Ecuador 0.8%
Mexico 0.7%
Peru 1.1%
Venezuela -0.2%
Middle Income 3.5%
Table 32.1: Per Capita Annual Real GDP Growth in Select Latin American Countries, 1980-2010 (%)
Source: World Bank, World Development Indicators Database, 2013
Country Growth Experiences
Figure 32.2: World Economic Growth, 1971-2011
Source: World Bank, World Development Indicators Database 2013
Table 32.2: Income, Growth, and Population Comparisons, Selected Countries and Country Groups
Country or Category
GDP per Capita, 2011 (PPP, 2005, US $s)
Percent Growth in GDP per Capita (PPP,
Annual Average, 1990-2011)
Percent of World Population (2011)
High Income 33,566 1.5% 16.3% Hong Kong 44,640 3.0% 0.1% United States 42,486 1.4% 4.5% Japan 30,660 0.7% 1.8% France 29,819 1.0% 0.9% South Korea 27,541 4.3% 0.7%Middle Income 6,245 3.5% 72.0% Russia 14,821 0.8% 2.0% Turkey 13,468 2.5% 0.8% Brazil 10,279 1.7% 2.8% China 7,418 9.5% 19.3% India 3,203 4.7% 17.8%Low Income 1,182 1.9% 11.7% Bangladesh 1,569 3.6% 2.2% Nepal 1,106 2.1% 0.3% Haiti 1,034 -1.4% 0.1% Ethiopia 979 2.8% 1.2% Congo, DR 329 -3.0% 1.0%
Source: World Bank, World Development Indicators Database, 2013. * Data for Haiti growth rate is for 1991–2011.
Figure 32.3: GDP per Capita in 2011 (in constant 2005 PPP $ per person)
Source: World Bank, World Development Indicators Database, 2012
South Korea
Botswana
China
India
GD
P p
er c
apit
a, P
PP
Per
cen
t o
f H
igh
-In
com
e G
DP
Figure 32.4a: Per Capita GDP Expressed as a Percentage of per-Capita GDP in High-Income Countries
Source: World Bank, World Development Indicators Database, 2013
GD
P p
er c
apit
a, P
PP
Per
cen
t o
f H
igh
-In
com
e G
DP
Figure 32.4b
Source: World Bank, World Development Indicators Database, 2013
Figure 32.5: Growth and Income Relationship with Area Proportional to Population
Source: World Bank, World Development Indicators Database, 2013
Table 32.3: Growth Rates and Changes in Poverty Rates, Select Countries
Period Annual Growth Rate in per Capita
GDP, % Poverty Rate at
Beginning of Period, % Poverty Rate at End of
Period, %
Bangladesh 1984-2010 2.9 60.6 43.3
Brazil 1981-2009 1.1 13.6 6.1
China 1981-2009 9.1 84.0 11.8
Egypt 1991-2008 2.9 4.5 1.7
Ethiopia 1982-2011 1.8 66.2 30.7
India 1978-2010 3.9 65.9 32.7
Indonesia 1984-2010 3.6 62.8 18.1
Mexico 1984-2010 0.8 12.8 0.7
Nigeria 1986-2010 2.3 53.9 68.0
Philippines 1985-2009 1.6 34.9 18.4
South Africa 1993-2009 1.5 24.3 13.8
Thailand 1981-2010 4.2 22.0 0.4
Source: World Bank, World Development Indicators Database, 2013.Note: The poverty rate is based on a poverty line of $1.25 per day.
Inequality
Top 20%: 82.8%of world income
Next 20%: 9.9%of world income
Third 20%: 4.2%of world income
Fourth 20%: 2.1%of world income
Poorest 20%: 1.0%of world income
Figure 32.6: The Unequal Distribution of the World’s Income, 2007
Source: I. Ortiz and M. Cummings, “Global Inequality: Beyond the Bottom Billion,” UNICEF Social and Economic Policy Working Paper, April 2011.
Top 10 Percent
Top 1 Percent
Figure 32.7: Shares of U.S. Income Going to Top 10 Percent and Top 1 percent, 1920-2012
Source: Thomas Pickett and Emmanuel Saez U.S. incomes series, http://elsa.berkeley.edu/~saez/TabFig2012prel.xls
Figure 32.8: The Relation Between Life Expectancy and Income, with Area Proportional to Population
Source: World Bank, World Development Indicators Database, 2013
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