Monday, January 18, 2010

Globalization at exp(x)

Gregg Easterbrook in his book Sonic Boom: Globalization at Mach Speed --

Even taking into account the post-2008 slowdown, worldwide economic production has risen at a pace that is difficult to believe. In the last thirty years, China's gross domestic product rose from around $500 billion to $2.7 trillion-that is to say, five times as much new economic production in the last thirty years as all forms of economic production just a generation ago. China is not some spectacular exception to a rule; rather, it is the leading indicator of an extraordinary economic surge across most, although of course not all, of the globe. Costa Rica, for example, increased its economic production from $8 billion in 1977 to $30 billion in 2008-more than three times as much new economic activity in the last three decades as total economic activity a generation ago.

Interesting fact:

GDP of Sweden, 1900 -- 2.245 billion Kroner
GDP of Sweden, 1930 -- 9.271 billion Kroner

In other words, by 1930, Swedish GDP had changed by more than 3 times as much as its initial level. Good times!

And note: we didn't pick Sweden because for being exceptional. It's a rich country today so of course it's exceptional. But it's had good data for a long time, which is what one needs to discuss any claim relying on the current period being exceptional for some new group of countries.

Source: Historical National Accounts of Sweden, series GDP by expenditure at purchasers prices

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