Facts About Growth Slide 1 Data on growth and development Fact #3: Growth rates are not necessarily constant over time. Fact #3: Growth rates are not necessarily constant over time.  In the U.S. and in several poor countries growth rates have not changed so much.  In many Newly Industrialized Countries (NICs) growth rates have increased dramatically.  This means that countries can catch up or can move from being rich to being poor:  This observation leads to the following fact: Fact #4: Countries can move over time from being “poor” to being “rich” and vice-versa. Fact #4: Countries can move over time from being “poor” to being “rich” and vice-versa.

Facts About Growth Slide 2 Data on Growth and Development Same as slide 11

Facts About Growth Slide 3 Cumulative Distribution of World Population

Facts About Growth Slide 4 Other “stylized facts” Fact #5: In the United States over the last century: Fact #5: In the United States over the last century:  1. The real rate of return to capital is roughly constant over time.  2. The shares of income devoted to capital and labor are also constant over time.  3. The average growth rate of output per person has been positive and relatively constant over time. Fact #6 Growth in output and growth in the volume of international trade are closely related. Fact #6 Growth in output and growth in the volume of international trade are closely related.

Facts About Growth Slide 5 US Real Per Capita GDP

Facts About Growth Slide 6 Growth and Trade

Facts About Growth Slide 7 Conclusions Technological change that takes the form of the introduction of new goods and/or processes is at the heart of Schumpeterian growth theory. This theory formalizes the notion of creative destruction. It analyzes non-convexities, distortions and imperfect competion. There are three classes of Schumpeterian growth models  Earlier endogenous growth models  Semi-endogenous growth models  Fully-endogenous growth models