[OPE] world GDP per capita

From: Jurriaan Bendien <jurriaanbendien@online.nl>
Date: Sun Jan 23 2011 - 06:13:46 EST

I ran a few rough calculations for the 2000-2009 interval (ten years), which
suggest that world gross product per capita (at ppp) is actually increasing.

World gross product per capita in 2009 stood at circa US$9,445. Nominally I
obtained a figure of $6,655 for 2000. In the Netherlands where I live, GDP
per capita in 2009 is fully five times the 2009 world average (for the US,
it's almost the same, 4.87x).

I have assumed a world population of 6,115 million 2000 and 6,810 million in
2009, and a nominal world gross product of $40,700 billion in 2000; $64,320
billion in 2009.

Nominally, world gross product per capita increased according to my
calculation at an average of circa 4.19% per year, but if adjusted for price
inflation using the US CPI (after all, world gross product is expressed in
USD), it averages 1.73% per year.

It's a very dodgy calculation though, both because of:

(1) methodological differences in the compilation of national GDP estimates,
particularly for the largest national contributors to world gross product,
and because
(2) the nominal world figures should in principle be adjusted by a weighted
index for world price inflation and not by the US inflation rate (core
inflation in the developed countries 2000-2009 averaged around 1.5% but it
was about double that in "emerging" economies containing much more of the
world population).

I assume that if I made proper weighted adjustments for world price
inflation, then I would find that world gross product per capita stays
pretty much constant across 2000-2009, or at any rate increased less than 1%
in real terms. Thus, if the world population increases, world gross product
will increase also, but the increase is only proportional to the growth of
the world population, and not much more.

How can such a result be squared with the much lauded growth in incomes of
the new middle classes, for example in China? It must be, that while the
incomes of a fraction of the world population increased, the incomes of
another fraction decreased in real terms, largely or completely cancelling
out the gain in world aggregate. GDP figures tell us nothing about the real
distribution of household incomes, at most they indicate something about
factor incomes (in general, "factor shares" have increased in favour of
operating surplus, i.e. gross profit).

Perhaps one of the learned academics wil attempt a more precise
calculation... correct me if I am wrong (for some scholarly reflections, see
e.g. Shaikh's paper
http://homepage.newschool.edu/~AShaikh/VMIPaperIv3j.pdf )


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