Sunday, April 14, 2013

GDP growth rates


Definition of GDP "real" growth rate values plotted above:  Annual percentage growth rate of GDP at market prices based on constant local currency. Aggregates are based on constant 2000 U.S. dollars. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.

The analysis of the data in the above chart further indicates: 

                        real_GDP_growth_rate = 4 * natural_growth_rate_of_the_population

Where natural_growth_rate_of_the_population is the birth rate minus the death rate, as a percent of the total population.

The overall suggestion here is that growing our population by having children (natural population growth) stimulates economic growth, and it does this at a 4x magnified rate!  Examples:

  • 0 % natural population growth gives 0 % GDP growth
  • .25 % natural population growth gives 1 % GDP growth 
  • .5 % natural population growth gives 2 % GDP growth - today's situation
  • 1 % natural population growth gives 4 % GDP growth
  • and so on

How can this be explained?  I don't know.  Maybe raising kids, providing for their food, shelter, clothing, education, and health care somehow motivates us to strive for more, to work more and to produce more.

hmm...

No comments:

Post a Comment

be sure to scroll down and hit the publish button when done writing