macro_HW_5_ans

# Pick a group of ten countries and examine their

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. Pick a group of ten countries and examine their initial levels of per capita real GDP in 1960. Then calculate the average growth rate of per capita real GDP since 1960. Do your results suggest that countries that initially have lower per capita real GDP indeed grow faster than countries that initially have a higher per capita real GDP? See attached figures 3

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6 4 ncome 2 r capita in 0 th of per Growt -2 5 6 7 8 9 10 Income per person in 1960 Figure 1: Growth of per capita income for 63 countries, 1960-2003 Note: This figure is a scatter plot of data from 63 countries. The average growth rate of per capita income, shown on the vertical axis, bears little relation to the initial level of per capita income (logarithmic scale), shown on the horizontal axis. 4
6 5 ncome 4 r capita in 3 th of per 2 Growt 1 7.0 7.5 8.0 8.5 9.0 9.5 10.0 Income per person in 1960 Figure 2: Growth of per capita income for 22 OECD countries, 1960-2003 Note: This figure is a scatter plot of data from 22 OECD countries. The average growth rate of per capita income, shown on the vertical axis, is inversely related to the initial level of per capita income (logarithmic scale), shown on the horizontal axis. 5
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