Wednesday, August 18, 2010

A History of Real GDP Around the World

There is always a lot of talk about “how this generation is different.” An extension of that is how “this new economy is different.” That’s all crap.

Being able to see similarities is a standard part of any IQ test – that’s why they give you so many analogy questions. Being unable to see similarities seems to me to be a hallmark of journalists. But, I digress.

Here. we do have a huge dissimilarity. China and India have always had the biggest economies. They stopped having the biggest economies because they fell behind in the well-being revolution of the 19th century. There is no reason to expect current economies to behave differently: so if we look at this diagram in 100 years (some of you will still be here), it will look like the left hand side, not the right hand side.

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