Thursday, August 20, 2009
Two Centuries of Growth
The Growth of Real Income (real gdp per capita) in the US demonstrates the transition from an agrarian to industrial to post industrial power. Growth was slow initially but rose over the 19th century in fits and starts. It would rise sharply during booms only to stagnate or fall slightly through busts lasting a decade or more. A dramatic fall occurred over 1929 to 1933 followed by as dramatic a rise climaxing during World War II before settling back to extended consistent growth at the best rates ever. Variability has diminished somewhat over time. Most deviations are small from this upward drift over history. Growth appears to have reached an asymptote of about a factor of 10 per century or about 2.3% a year. So much for past golden ages.