KW_Macro_Ch_08_Sec_04_Sucess_Disappointment_and_Failure

KW_Macro_Ch_08_Sec_04_Sucess_Disappointment_and_Failure -...

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>> Long-Run Economic Growth Section 4: Success, Disappointment, and Failure chapter 8 As we’ve seen, rates of long-run economic growth differ quite a lot around the world. We conclude this chapter with a look at three regions of the world that have had quite different experiences with economic growth over the last few decades. Figure 8-6 shows trends since 1960 in real GDP per capita for three countries: Argentina, Ghana, and South Korea. (As in Figure 8-1, the vertical axis is drawn in proportional scale.) We have chosen these countries because each is a particularly striking example of what has happened in its region. South Korea’s amazing rise is part of a broad “economic miracle” in East Asia. Argentina’s stagnant real GDP per capita is more or less typical of the disappointment that has characterized Latin America. And Ghana’s unhappy story—despite some recovery since the mid-1980s, real GDP per capita is still lower than it was in 1960—is, unfortunately, typical of Africa’s experience.
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In 1960 South Korea was a very poor country. In fact, in 1960 its real GDP per capi- ta was lower than that of India today. But, as you can see from Figure 8-6, beginning in the early 1960s South Korea began an extremely rapid economic ascent: real GDP per capita grew about 7% per year for more than 30 years. Today South Korea, though still somewhat poorer than Europe or the United States, looks very much like an eco- nomically advanced country. South Korea’s economic growth is unprecedented in history: it took the country only 35 years to achieve growth that required centuries elsewhere. Yet South Korea is 2 CHAPTER 8 SECTION 4: SUCCESS, DISAPPOINTMENT, AND FAILURE Figure 8-6 Real GDP per capita (2002 dollars) Year 1965 1960 1970 1975 1980 1985 1990 1995 2000 2003 16,000 8,000 4,000 2,000 1,000 500 South Korea Ghana Argentina Success, Disappointment, and Failure South Korea and some other East Asian countries have been highly successful at achieving economic growth. Argentina, like much of Latin America, had relatively high real GDP per capita in the early twentieth century but has achieved little growth in real GDP per capita over the past half-century. Ghana, like most of Africa, started poor but has become even poorer over time. Source:
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