Ranking of Per Capita GDP
Let us focus on the relative standing of the
US in the world economy. Here, T = trillion, B = billion, M = million, etc. GDP
= Gross Domestic Product
In 1975, US trade surplus was
about $12 billion, but that would be the last time in the 20th century that
the United States had a trade surplus. In 1989, the US export amounted to $364
B, but imports were about $493 B. Thus, we had a trade deficit of $129 B(X -
M = T = -$129 B). In 1997, our trade deficit was $198 billion, which was the
largest in the world. (UK had the second highest trade deficit of $21 B). In 2006, US trade deficit increased to $760 billion, and US bilateral trade deficit rose to $230 billion. China has now replaced Mexico as our second largest trading partner.
These charts were made by http://www.economagic.com.
If you connect $1,000 bills to make a long string of bills, it would cost about
$260 B to circle around the entire earth. If you connect New York and Tokyo
with $1000 bills, it would be less than $130 B.
(40,000km = 133,512,000 ft = $267,000,000,000 (2 bills per
foot) = $267 B.
It costs about $11 B to cover one time zone.
Japan achieved the most impressive growth record
of the post World Wart II era. In 1950, the real per capita GNP of Japan was less
than 1/5 that of the U.S. $1,060 compared to $6,330 for the US.
However, the Japanese economy grew during the period 1950 - 1980.
Japanese real GNP grew at an annual rate of 7.4%.
Real Per Capita GNP (1950/1980 = 1980 $)
Country Growth (%) 1950 ($) 1980 ($)
US 2 6,330 11,500
Canada 2.3 5,210 10,300
WG 4.9 3,170 13,370
Australia 2.9 3,960 9,400
France 4.4 3,360 12,160
Japan 7.4 1,060 8,900
U.K. 3.2 3,540 9,300
If the growth rates were sustained, Japan's income would be higher than that of US before 1990. However, Japan's economy collapsed in the early 1990s, and its growth rate has since declined, which can be attributed to protectionism. China's growth rate has been over 10 percent during the past decade, which is likely to be sustained for another decade. But China's protectionist policy may slow their growth.
In 1945, US GDP was $223 billion (in 1998 dollars) and its population was 140 million. US GDP per capita was only about $1600 in current dollars. China's income per capita today exceeds this amount.
| Doubling |
Tripling |
Quadrupling |
| Rule of 70 |
Rule of 110 |
Rule of 140 |
|
70/g = N
g = growth rate (%), N = # of years it takes for a growing variable to double.
Some people also use the Rule of Seventy Two (72/g = N).
For growth rates less than or equal to 5%, the Rule of Seventy is more accurate
than the Rule of Seventy Two, which is more accurate for g > 5%. However,
both rules underestimate the actual value of N when g > 10%.
Remember that
these rules are for approximation purposes only. Use either
rule only for growth rates less than or equal to 10%. For more information,
read my note on The Rule of Seventy. The same rule can be applied to negative growth, i.e., 70/g is the number of years when the entity halves, where g is the absolute value of the shrinking rate.
|
110/g = N
g = growth rate (%), N = # of years it takes for a variable to treble or to third (to reduce to one third) its size. |
140/g = N
The Rule of 140 (140/g = N) tells us the number of years it takes for a variable to quadruple or to quarter (to reduce to one fourth) its size. This rule can be obtained by applying the rule of seventy (or seventy two) twice. For growth rates exceeding 5%, Rule of 144 (72 x 2) should be more accurate than the Rule of 140.
See David Coutts |
What if the growth rates exceed 10%?
For the purpose of approximation,
use 76 rule for g = 20%
use 79 rule for g = 30%
use 82 rule for g = 40%
use 85 rule for g = 50%
use 88 rule for g = 60%
use 91 rule for g = 70%
use 94 rule for g = 80%
use 97 rule for g = 90%, and
obviously, use 100 rule for g = 100%, which means 100/100 = 1, or if the growth
rate is 100% per year, it will take exactly one year for the growing entity
to double its size.
But who is going to remember all these numbers?
So, here is an even more pracrtical way to memorize the above numbers. For every 10% increment in the growth rates above 0%, add 3 more years to the rule of Seventy. In other words, if the growth rate is slightly above 10%, use the Rule of Seventy Three. If the growth rate is 40%, (3 × 4 = 12%, and hence) use the rule of (70 + 12) = 82, etc. This is a useful and practical rule, which slightly deviates from the above numbers.
Per Capita GDP
World Bank: 1991 (World Development Report, 1993).
Ranking Country Per capita GDP (1991) 1997
1. Kuwait ?
2. Switzerland 33,610
3. Japan: 26,930 42,000
4. Sweden 25,110
5. Norway 24,220
6. Finland 23,980
7. Denmark 23,700
8. Germany 23,650
9. US 22,240 27,700
10. Canada 20,440
11. France 20,360
17. UK 16,550
18. Singapore 14,210
19. Hong Kong 13,430
107. China 370
125. Uganda 170
Warning: it is important to note the limitation of GDP when
comparing the living standards of countries. These income figures are computed
using the current exchange rates. By definition, exchange rates are biased as
they are based on the prices of traded goods and nontraded goods are ignored.
These may not reflect the real standard of living. For example, in 2002, US
per capita GDP of $36,000 and that of China was about $1000. This does NOT mean
that the living standard of a typical American was 36 times that of a Chinese.
Realistically, Americans may be only three times as well off as Chinese, due
to low prices in China. Also, the World Bank report argues that for example,
Americans live in spacious houses and less polluted environment than the Japanese,
even though per capital income leves of both countries were about the same in
the early 1990s.
Is America Stingy?
'Stingy'
Americans and the Charity Racket --Patrick Buchanan
copy
Give a man a fish and he will eat for a day. Teach a man to fish and he will
eat for a lifetime. (Jay Leno)
GDP Updates
CIA
estimates of GDP, 2005 (copy)
CIA
estimates of per capita GDP, 2004 (copy)
Goldman
Sachs Report (2003) copy
Population
See World
Population Growth, 1998.
To get more information about population, visit Population Reference Bureau.
Investment/Output Ratio Net I/O
US 14% 4%
J 27% 17%
F 19% 9%
G 19% 9%
Canada 19% 9%
Top 10 Traders
In 1958, the total volume of trade was about $100B
In 1976, it increased to $1 T. After adjusting for inflation,
the real volume of trade tripled during the 18 year period.
Since the end of WWII, the world trade volume increased
twelvefold.
In 1991, the total volume of trade was about $3 T
Exports:
1. Germany = $402B = 13%
2. US = $398B = 13% of world export.
3. Japan = $314B = 10.5% (M = $234B = 8%)
4. France = $213 = 7%
5. UK = $185 = 6%
6. Italy = $170 = 6%
7. Nether. = $134 = 4.5%
8. Canada = $125 = 4%
9. Bel/Lux = $118 = 3%
10. China = $73B
11. Korea = $71B
Hong Kong Export $29B (1991) = 1%
Import $100B = 3%
Top 10 countries account for 2/3 of world trade.Top 10 Exporting Countries
Imports:
1. US = $506B = 17% of world imports
2. Germany = $388B = 16%
3. Japan = $234B = 8%
With Joseph Stiglitz (2001 Nobel Laureate)
Asia's Future: China
Bruce Einhorn in Hong Kong, October 29, 2001, Businessweek
William Fung is a practical man. As group managing director at Hong Kong's
Li & Fung Ltd., a giant Hong Kong trading company, his job is to find ways
to produce and ship goods to global markets the fastest and cheapest way possible.
So he already has a plan for China's imminent entry into the World Trade Organization,
the global body that enforces free-trade rules. One of the trade barriers that
Li expects to fall is U.S. and European import quotas on clothes made in Chinca
for children up to 2 years old. Most of the apparel Li & Fung trades in
that category is now produced in Egypt, Thailand, Sri Lanka, Honduras, and Guatemala.
Fund plans to shut operations in all those countries and move baby-clothes production
to southern China. Sure, the labor will cost a bit more in China, "but
the productivity!" he says. Moreover, transportation to the key U.S. market
is faster. "Shipment time from China to California is 14 days, vs. 30 days
from Sri Lanka."
...
And it will affect every region of the world. Flextronics is rapidly expanding
its two sprawling manufacturing complexes in China, where it now makes cell
phones and computer products. Within seven years, Mexico and the Caribbean will
lose thousand of garment-industry jobs to China as the U.S. and Europe lift
their last restraints on Chinese-made textile products. In Taiwan and Malaysia,
two of the high-tech export hot spots of the 1990s, new investment in semiconductor,
disk drive, and computer plants is drying up as companies such as Intel, Motorola,
and Dell Computer move production to China.
...
Low-Cost Producers.What makes china such a formidable manufacturing
center? It has an abundant pool of young, high school-educated workers earning
about $1.50 a day, with millions more entering the workforce each year. China's
many universities and institutes are turning out well-trained yet relatively
low-paid entineers. The cost of industrial land is among the cheapest in the
world--about $25 per square meter in Shanghai, half the price of that inKualalumpur
and Bangkok and 60 times cheaper than in Yokohama, Japan.
...
China's success comes at the expense of workers and companies throughout the
developing world that offer cheap labor but not much else. Even in India, which
has some of the planet's lowest wages, low-tech industries can't compete with
the Chinese in productivity. Shops in Bombay and Calcutta are flodded with Chinese
goods. The Indian government is so worred about China that it has refused to
allow Chinese software companies to locate in the high-tech center of Bangalore
and scotched plans by software powerhouse Infosys Technologies to train 200
Chinese employees in India.
...
Already, more than 100 million peasants have flocked to the cities in search
of work, and that number is likely to increase, adding to China's angry underclass.
A Brief History of US Currency: http://planet-hawaii.com/hbb/link3.html
GDP per capita in history
In 1405 Zheng He, a Chinese admiral, led an expedition of 317 ships with more than 28000 troops to the west, reaching eventually Europe and Africa. (When he was a boy, he was caught in a Mongolian rebellion which was squashed by the newly rising Ming dynasty, and was castrated. Subsequently, he served Emperor Yongle.) After he returned, the new emperor decided to stop trading with the West because there is nothing China can learn from them. This was the beginning of the decline of China that lasted six hundred years.
During the 20th Century, per capita income of the world more than quadrupled,
or more than doubled every fifty years (or a growth rate of 1.4% per year).
Income statistics have been gathered during the last century, and there is no
income data four centuries ago. However, the two paintings below show that per
capita income of Europeans four centuries ago would have been less than $500.
