Economic growth and economic development 35

Introduction to Modern Economic Growth in Figure 1.9 above In particular, since gt,t−1 ' ln yt − ln yt−1 , equation (1.1) can be written as ln yt ' (1 + β) ln yt−1 + εt Figure 1.9 showed that the relationship between log GDP per worker in 2000 and log GDP per worker in 1960 can be approximated by the 45◦ line, so that in terms of this equation, β should be approximately equal to This is confirmed by Figure 1.14, which depicts the relationship between the (geometric) average growth rate between 1960 and 2000 and log GDP per worker in 1960 This figure reiterates that there is no “unconditional” convergence for the entire world over the postwar 06 period HKG KOR 04 THA annual growth rate 1960-2000 02 CHN JPN MUS MYS ROM PAK IND COG NPL GNB UGA BFA TZA ETH CPV LKA BGD PAN IRN CHL TTO MEX JOR ECU GTM CIV PHL GMB ZAF URY PRY KEN GHA COL SLV CRI BEN GIN HND CMR TGO JAM RWA PER BOL COM SEN TCD MOZ MDG ZMB MLI NER NGA NIC ZWE LUX ISL GBRDNK USA NLD SWE AUS CAN CHE ARG NZL VEN -.02 BDI PRT BRB ESP GRC AUT ITA SYR FIN GAB TUR ISR BEL FRA EGYDOM BRA NOR MAR SYC IDN LSO MWI IRL log gdp per worker 1960 10 Figure 1.14 Annual growth rate of GDP per worker between 1960 and 2000 versus log GDP per worker in 1960 for the entire world 21