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

Figure 3. Illustration of the growth model for real GDP per capita

Figure 3 depicts an arbitrary GDP evolution curve, lnG(t), which shows episodes of rapid growth (t1) and recession (t2). It is easier to illustrate the performance of the model on extreme cases and then to proceed by showing how GDP growth relates to the two defining components at t1 and t2.

The growth rate is nothing but the first derivative of the function lnG(t). So, we are interested in how the tangent of the curve behaves. Let’s first consider the case of the rapid growth in t1. The overall growth rate g(t1) is the tangent to the curve at point t1. Please notice that if the age-specific population is fixed (dNs(t1) = 0), the inertial growth rate gi would be the tangent to the lnG(t). Nevertheless, we observe that dlnNs(t) > 0 what results in a rise in the GDP above the inertial level of growth.

The second case is similar but differs in the direction of the overall growth. Please notice that gi(t1) > gi(t2) as the attained level of real GDP per capita is higher at t2 and A/G(t1)>A/G(t2). Furthermore, the rate of change of the age-specific population is negative, which leads to the overall negative growth as the GDP declines

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