Oliver W. Kim

The Mountain To Climb

Jan 1, 2022

At , when
will reach 2019 GDP per capita in ?

As we enter a new year, it’s worth thinking about the problem of economic growth, particularly for the hundreds of millions who still live in extreme poverty. With this tool, you can calculate how long it will take for developing countries to reach higher income levels–the mountain to climb, so to speak–under a range of growth scenarios, ranging from the pessimistic to the optimistic.

The figures lay bare the harsh logic of compounding economic growth, and the staggering levels of inequality between countries. Some stark examples:

Note that these are not predictions–they are simply projections of future economic growth based on the historical trend of your choice.

This data is current as of 2019. It does not include the devastation of the Covid-19 pandemic, which has likely erased most of the economic gains of the past decade, and pushed hundreds of millions of people into extreme poverty.

Economic growth is not everything. The economic needs of human beings need to be balanced against the preservation of the environment and the quality of non-human lives. The distribution of economic output also matters: if a small elite hoards all the economic gains, then for the average person headline GDP growth is largely irrelevant. But we know that, on average, the availability and quality of things that make safer and healthier lives possible–health care, education, housing, entertainment, freedom from violence–grow with incomes per capita. The largest reduction in poverty we know of, the Chinese economic miracle, came as the result of rapid economic growth.

Note also that this tool does not calculate “convergence” or “catch-up”, strictly speaking. The United States and other developed countries will likely continue to grow; convergence is trying to chase down a moving target. By contrast, in this exercise, the reader chooses a static income target they want to hit, which hopefully corresponds to a comfortable and dignified quality of life. If you’re interested in convergence, check out this alternative version of this tool.

In some sense, then, this exercise is agnostic. It shows us, based on historical experience, how long it would take to bring the incomes of current developing countries to any level that we choose. It does not say which policies to enact, which projected growth rate is achievable, or even which target level of income is desirable. It is then up to us–or, more correctly, the people living in these developing countries–to decide what paths align most with their values.

Real GDP per capita is expenditure-side real GDP at chained PPPs (2017 US$), divided by population, using underlying data from the Penn World Tables, version 10.0: Feenstra, Robert C., Robert Inklaar and Marcel P. Timmer (2015), “The Next Generation of the Penn World Table” American Economic Review, 105(10), 3150-3182, available for download at www.ggdc.net/pwt.

Version 0.7. Comments and suggestions welcome.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.


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