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10 thoughts on “Raw data: Global economic growth

  1. JRF

    Nice! I've seen the U.S. real GDP growth graph so many times (sometimes with D and R presidents noted and so on), but oddly enough have never seen this world GDP graph.

    For all us U.S. navel-gazers, it would be interesting to see the two superimposed — i.e. when the U.S. has been leading vs lagging the world on this metric.

    1. JohnH

      Quite so. Apart from a marginally higher mean and much lower variance in the 1960s, it's impossible to see a trend. All he gets is wild swings around a near unchanging mean. The ability to fit a line through it seems only to cause him to find a trend without really showing one.

      Besides, the dips are already so familiar. There are lots of lessons to be had from Nixon's screwing up the economy with a protracted, pointless, and murderous war, then trying to hide this with wage and price controls. There are lessons from Carter's facing both this and a brief OPEC blip, tackling it, and suffering the electoral consequences. There are plenty more from the weird smaller crash of 1987, the tech boom of around 2000, and of course the Great Recession. What those lessons are for today is of course less clear. But seeing this as the story of global decline is less compelling.

      It may be that we're at an end of something special about the manufacturing economy of much of the last century. There may be strange happenings now in China and in the future, at SOME point if Kevin only hopes, for AI. But this isn't it.

    2. gvahut

      After the 1973 oil crisis, things look pretty flat (on average) to me. Kevin's decisions on line-drawing and date ranges to show are often somewhat skewed, like his lines.

  2. SDSwmr

    I wonder how this tracks (or not) with population growth. Or population size. Or anything else, because this graph is interesting.

  3. jte21

    It would be interesting to see a similar chart with average rate of return on capital over the same period, if such a thing were possible to generate. This goes to the thesis of Thomas Piketty in Capital in the 21st Century where he argues that decreasing growth combined with higher rates of return on investment capital produces increasing wealth inequality. The post-WWII period, particularly in the US, was an unusual outlier where growth favored labor for several decades. Reagan and virtually all subsequent Republicans (sometimes unfortunately with a lift from "centrist" Democrats) put the kaibosh on that and made sure that economic policy would favor the rentier class going forward. And so here we are with a President elect whose net wealth recently increased by several billion dollars due to his stake in a self-titled company that does absolutely nothing and makes no money and creates zero jobs. *Chef's kiss*

      1. Narsham

        The interesting thing about that table at the link isn't that the union membership decline began in the 50s and continued with a sharper decline starting around 1978 (although that slope is very steep during the Reagan years); the interesting thing is what happens to the Income Share of the Top 1%, which is extremely high going into the Depression, spikes again in the late 30s and again in the very early 40s, then drops off a cliff after WW 2 and again in 1968, is low across the 70s, and then takes two massive jumps in the Reagan years (going from a low a bit above 10% as Reagan enters office and ending his second term around 15%).

        Reagan's big "contribution" was in massive giveaways to the wealthiest Americans.

        Looking at the table, I'm not even sure that income inequality isn't more affected by changes in the tax codes than by union membership, which tops out below 35% and doesn't appear more than loosely correlated to 1% income share. I'd speculate that the broader effect has more to do with the degree that the government is politically influenced by unions: the decline had to precede Reagan taking office to create a political climate where he could shiv the labor force in favor of Big Capital.

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