Key points
- Since 1950 there have been huge improvements in the production of stan-
dardized national accounts, making GDP figures comparable across coun-
tries and over time. - There are many interesting patterns in the growth story of the modern world
economy. - The rapid growth of Japan enabled it to close the gap with the developed
world and overtake Germany, France, the UK and Italy by the early 1990s. - The UK was the second richest economy in the world in 1950 and by the
1990s it had fallen behind Germany, Japan, Italy and France. - The growth experience of China after 1978 is striking though not particu-
larly different from the earlier rise of Japan. - The general story in Sub-Saharan Africa since 1960 is of slow or negative
growth,though there has been a revival of growth in the 2000s. - The economy of Russia collapsed at the end of the 1980s.
- The world economy grew rapidly during the years 1950 to 1973, after
which there was a generalized slowdown. Two exceptions were China and
India where growth rates accelerated. - The proximate causes of economic growth have been analyzed and meas-
ured in three principal ways: cross-country growth regressions, case stud-
ies of boom and bust, and growth accounting. - Results from growth-accounting exercises show a general pattern of
growth based on TFP in developed countries and growth based on factor
accumulation (especially investment) in developing countries. - The use of relatively long averages hides an important empirical regularity
about growth in the modern world economy, its instability and volatility. - Lans Pritchett argues that ‘Divergence in relative productivity levels and
living standards is the dominant feature of modern economic history’.
60 Sources of Growth in the Modern World Economy since 1950