Real GDP per capita: global redistribution of economic power

Kitov, Ivan (2021): Real GDP per capita: global redistribution of economic power.

Abstract

Growth rate of real GDP per capita, GDPpc, is represented as a sum of two components – a monotonically decreasing economic trend and fluctuations related to population change. The economic trend is modelled by an inverse function of GDPpc with a constant numerator which varies for the largest developed economies. In 2006, a statistical analysis conducted for 19 selected OECD countries for the period between 1950 and 2003 showed a very weak linear trend in the annual GDPpc increment for the largest economies: the USA, Japan, France, Italy, and Spain. The UK, Australia, and Canada showed a slightly steeper positive linear trend. The 2012 revision showed that the positive trends became much lower and some of them fell below zero due to the Great Recession. The fluctuations around the trend values are characterized by a quasi-normal distribution with heavy and asymmetric tails. This research revises the previous estimates and extends the set of studied countries by economies in East Europe, Latin America, BRICS, Africa, and Asia including several positive outliers with extremely fast growth. The change in GDP definitions and measuring procedures with time and economic source is discussed in relation to the statistical significance of the trend estimates and data quality requirements for a consistent economic model. The relative performance of all counties since 1960 is compared according to the predicted total GDPpc growth as a function of the initial value. The performance in the 21st century is analyzed separately as revealing potential and actual shifts in the global economic powers.

• Item Type: MPRA Paper
• Language: English
• Keywords: economic development, GDP per capita, economic trend, business cycle
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O57 - Comparative Studies of Countries

References

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Kitov, Ivan, 2006. "Real GDP per capita in developed countries," MPRA Paper 2738, University Library of Munich, Germany.

Kitov, Ivan, Kitov, Oleg, 2012. "Real GDP per capita since 1870", Papers 1205.5671, arXiv.org.

Kitov, Ivan, Kitov, Oleg, 2021. The link between unemployment and real economic growth in developed countries. (MPRA submitted)

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