study by the Organisation for Economic Co operation and Development OECD 1

Study by the organisation for economic co operation

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study by the Organisation for Economic Co-operation and Development (OECD), 1 whose members are listed in Table 8.1 “Growing Disparities in Rates of Economic Growth” . The table shows that for the OECD countries as a whole, economic growth per capita fell from an average of 2.2% per year in the 1980s to an average of 1.9% per year in the 1990s. The higher standard deviation in the latter period confirms an increased disparity of growth rates in the more recent period. Moreover, the data on individual countries show that per capita growth in some countries (specifically, the United States, Canada, Ireland, Netherlands, Norway, and Spain) picked up, especially in the latter half of the 1990s, while it decelerated in most of the countries of continental Europe and Japan. Table 8.1 Growing Disparities in Rates of Economic Growth 1. The material in this section is based on Organisation for Economic Co-operation and Development, The Sources of Economic Growth in OECD Countries , 2003. 8.3 DETERMINANTS OF ECONOMIC GROWTH • 273
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Trend Growth of GDP per Capita Country 1980–1990 1990–2000 1996–2000 United States 2.1 2.3 2.8 Japan 3.3 1.4 0.9 Germany 1.9 1.2 1.7 France 1.6 1.5 1.9 Italy 2.3 1.5 1.7 United Kingdom 2.2 2.1 2.3 Canada 1.4 1.7 2.6 Austria 2.1 1.9 2.3 Belgium 2.0 1.9 2.3 Denmark 1.9 1.9 2.3 Finland 2.2 2.1 3.9 Greece 0.5 1.8 2.7 Iceland 1.7 1.5 2.6 Ireland 3.0 6.4 7.9 Luxembourg 4.0 4.5 4.6 Netherlands 1.6 2.4 2.7 Portugal 3.1 2.8 2.7 Spain 2.3 2.7 3.2 Sweden 1.7 1.5 2.6 Switzerland 1.4 0.4 1.1 Turkey 2.1 2.1 1.9 Australia 1.6 2.4 2.8 New Zealand 1.4 1.2 1.8 Mexico 0.0 1.6 2.7 Korea 7.2 5.1 4.2 Hungary 2.3 3.5 Poland 4.2 4.8 Czech Republic 1.7 1.4 OECD24* 2.2 1.9 2.2 Standard Deviation of OECD24 0.74 1.17 1.37 *Excludes Czech Republic, Hungary, Korea, Mexico, Poland, and Slovak Republic 274 PRINCIPLES OF MACROECONOMICS
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Variation in the growth in real GDP per capita has widened among the world’s leading industrialized economies. Source : Excerpted from Table 1.1 Organisation for Economic Co-operation and Development, Sources of Economic Growth in OECD Countries , 2003: p. 32–33. The study goes on to try to explain the reasons for the divergent growth trends. The main findings were: In general, countries with accelerating per capita growth rates also experienced significant increases in employment, while those with stagnant or declining employment generally experienced reductions in per capita growth rates. Enhancements in human capital contributed to labor productivity and economic growth, but in slower growing countries such improvements were not enough to offset the impact of reduced or stagnant labor utilization. Information and communication technology has contributed to economic growth both through rapid technological progress within the information and communication technology industry itself as well as, more recently, through the use of information and communication technology equipment in other industries. This has made an important contribution to growth in several of the faster growing countries.
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