October 14, 2019
Long-Run Economic Growth
1200-2010 GDP per capita (Maddison Data)
1700-2010 GDP per capita (Maddison Data)
1800-2010 GDP per capita (Maddison Data)
1900-2010 GDP per capita (Maddison Data)
Cross-section of Countries
Countries with GDP per capita lower than $1.5K
Countries with GDP per capita higher than $40K
2014 GDP per capita (Penn World Tables)
Baumol (1967); Baumol and Bowen (1968)
Idea
Services industry sees less rapid productivity gains.
Therefore, services are an increasingly larger share of the economy.
This is an important fact, because some deindustrialization is needed.
Productivity gains low in Services
Manufacturing Productivity
Productivity gains low in Services
Productivity gains low in Services
Balassa-Samuelson Effect
Idea
Bibliography
Baumol, William J. 1967. “Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis.” The American Economic Review 57 (3): 415–26. https://www.jstor.org/stable/1812111.
Baumol, William J., and William G. Bowen. 1968. Performing Arts, the Economic Dilemma: A Study of Problems Common to Theater, Opera, Music and Dance. M.I.T. Press.