Insights From The Penn World Tables

.WealthymattersThe Penn World Tables, were created by Alan Heston, Robert Summers, and Bettina Aten of the University of Pennsylvania.They reveal how much larger all the word’s economies have become over time. The Penn Tables provide GDP data for both 1960 and 2010, providing a 50 year window to view global economic progress. It has been considerable. Looking at absolute GDP, no country anywhere in the world for which we have data is smaller today than it was in 1960. The countries that saw the size of their economies less than double since 1960 contain just 80 million people—a little more than 1 percent of the planet’s population. A further 1 billion people lived in countries where GDP climbed by somewhere between two- and five fold. That leaves 4.9 billion people—the considerable majority of the planet—living in countries where GDP has increased more than five fold over 50 years. Those countries include India, with an economy nearly 10 times larger than it was in 1960, Indonesia (13 times), China (17 times), and Thailand (22 times larger than in 1960).Such long-run growth rates are unprecedented. Compare the crucible of the Industrial Revolution: Between 1820 and 1870, U.K. GDP per capita increased from $1,706 to $3,190. That’s an increase of 87 percent. If the U.K. had seen the same performance between 1960 and 2010, it would place the country 34th lowest in terms of growth out of the 107 countries for which the Penn Tables have data. The U.K.’s 1820-70 income growth is weaker than the performance over the past half-century of such countries as the Philippines, Zimbabwe, and Syria—rarely thought of as economic powerhouses.

Mind boggling isn’t it?What do you think will happen to the size of the world’s economies by the time the world population is 9 billion?

About Keerthika Singaravel

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