Lecture01_fall2009 - Ec183 Fall 2009 Leah Boustan Lecture 1...

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1 Ec183, Fall 2009 Leah Boustan Lecture 1: Why Isn’t the Whole World Developed? 1. 1870-today: Growth for all, but faster in the developed world (“rich get richer”). 2. How do we measure growth? Does more income mean we are better off? 3. 1500-today: Reversals of fortune? 20 th century growth for all… …but faster in the developed world
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2 World Income Distribution (selected countries): 2003 0 5000 10000 15000 20000 25000 30000 USA Nor w ay Australia UK Japan G er ma ny B razi l C hina Egy pt Indi a 1990 dollars Source: Angus Maddison, World Population, GDP and Per Capita GDP, 1-2003 AD (2006) Income per capita World Income Distribution: 1870 0 5000 10000 15000 20000 25000 30000 US A Norway Au s trali a UK Jap an Germa n y B r a z il Chi na Eg ypt In dia 1990 dollars 1990 dollars Source: Angus Maddison, World Population, GDP and Per Capita GDP, 1-2003 AD (2006) Income per capita
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3 Comparing rich countries: 1870 vs. 1994 GDP per capita 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 Australia UK USA Germany Norway Japan GDP relative to US 1870, US = 100 1994, US = 100 Source: Pritchett (1997), “Divergence, Big Time” Comparing rich to poor countries: 1870 vs. 1994 GDP per capita 0 0.2 0.4 0.6 0.8 1 1.2 USA India China Brazil Egypt GDP relative to US 1870, US = 100 1994, US = 100 Source: Pritchett (1997), “Divergence, Big Time”
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4 Summing up the 20th century Most countries experienced substantial growth . Convergence (or narrowing gap) between developed countries. Divergence (or widening gap) between developed and developing world. But, are we picking winners? Compare Japan to Brazil in 1870… Other ways to express convergence graphically The US converges on UK from 1820-1900 (catches up with). The US diverges from other leading countries after 1900 (widens the gap with) . Other countries converge on the US after 1960 (narrow the gap with) .
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5 Does this graph show convergence? What to do with holes in the evidence?
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