Excellent read from Yale economist and Federal Reserve Bank of Minneapolis consultant Timothy Kehoe. He expresses that economic growth is driven by productivity growth as opposed to prevailing view of capital accumulation as driver.
This is shown with his use, as the beginning stage and presented in excerpt below, of the Malthusian Trap. Fascinating to me and fundamentally important is how this can be applied to global economic growth beyond his analysis.
From 1999 to 2013 (set in 2013 dollars) the World GDP – per capita (PPP) rose from $6800 to $13,100.
How do we move forward with this information?
- wait and see: continued development and economic growth
- search for post Kehoe analysis: next level (Kehoe 4?) and new cycle of leader-style
- present consideration: spread of investment into a global economy
“The median annual household income worldwide is $9,733, and the median per-capita household income is $2,920″ by Glenn Phelps and Steve Crabtree via Gallup.
Stages of economic growth
We classify the countries in our sample into four stages of economic growth. (For details on country data and classification, see the appendix.)
0. Malthusian trap
1. Taking off into growth
2. Catching up to the economic leader
3. Joining the economic leader