Growth Rate Of The GDP Per Capita Revisited. The Results From 2007, 2009, And 2012 Revisited

Gi(t) = Gi(t0) + At                                                                                                              (3) 

The relative rate of growth along the inertial linear growth trend, gi(t), is the reciprocal function of Gi or, equivalently, G

gi(t) = dlnGi/dt  = A/Gi = A/G(t)                                                                                     (4) 

Relationship (4) implies that the rate of GDP growth will be asymptotically approaching zero, but the annual increment A will be constant. Moreover, the absolute rate of the GDP per capita growth is constant and is equal to [$/y]. This constant annual increment thus defines the constant “speed” of economic growth in a one-to-one analogy with Newton’s first law. Hence, one can consider the property of constant speed of real economic growth as “inertia of economic growth” or simply “inertia”. Then the growth, which is observed without the change in the specific age population, can be called the “inertial growth”.

In physics, inertia is the most fundamental property. In economics, it should also be a fundamental property, taking into account the difference between the ideal theoretical equilibrium of space/time and the stationary real behavior of the society. Mechanical inertia implies that no change in motion occurs in the absence of net external force and without a change in internal energy. (In the real world, the net force is zero for constant speed, but one should apply extra forces in order to overcome the net traction force and to keep the body (e.g., car) moving at a constant speed.) For a society, the net force applied by all economic agents is not zero but counteracts all dissipation processes and creates goods and services in excess of the previous level. The economy does grow with time and its “internal energy” as expressed in monetary units does increase at a constant speed.

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