In the last quarter of the 19th century new technologies (electricity, oil, cars), called Second Industrial Revolution, have been developed enhancing a push in productivity and capital accumulation. We observe that in the period of 1870-1913 GDP growth as well as GDP per capita growth have been accelerated in USA, WE, EE and LA but there is also a new comer, Japan. In this country commercial capitalism has been already developed and a wealthy bourgeoisie had emerged in the previous period. In 1878 this bourgeoisie overthrown the Shogun government (Meiji Revolution) and opened the ways of economic and social reforms (free market, property rights, mass schooling). The highest growth performance is again observed in USA (Western Offshoots): GDP growth 3.9% and per capita growth 1.8%. Note that population growth diminished but still quite high: 2.1%. The second best performer was LA with GDP growth of 3.5% and 1.8% for GDP per capita growth. Note that population growth increased to 1.6%; migration played a significant role in high GDP growth. The third best performer was Japan: 2.4% for GDP growth and 1.5% for GDP per capita growth. In WE GDP growth and GDP per capita growth attained 2.1% and 1.3 % respectively, in EE 2.4% and 1.5%. Question 2: Write the logarithmic equation for Japan in this period given Logy and admitting LogL as 1% (Population growth 0.95%) and a=0.4. Then discuss what could have been the contributions of capital stock growth and TFP to GDP growth The World Economy: A Millennial Perspective Table 3-1a. Growth of Per Capita GDP, Population and GDP: World and Major Regions, 1000-1998 (annual average compound growth rates) 1000-1500 1500-1820 1820-70 1870-1913 1913-50 1950-73 1973-98 Western Europe Western Offshoots Japan Asia (excluding Japan) Latin America Eastern Europe & former USSR Africa World Western Europe Western Offshoots Japan Asia (excluding Japan) Latin America Eastern Europe & former USSR Africa World Western Europe Western Offshoots Japan Asia (excluding Japan) Latin America Eastern Europe & former USSR Africa World Source: Appendices A and B Western Europe Western Offshoots Japan Asia (excluding Japan) Latin America 0.13 0.00 0.03 0.05 0.01 Eastern Europe & former USSR Africa World Interregional Spreads 0.04 -0.01 0.05 0.16 0.07 0.14 0.09 0.09 0.16 0.07 0.10 0.30 0.07 0.18 0.13 0.09 0.20 0.06 0.15 1000 400 400 425 450 400 0.15 0.34 0.09 0.00 0.15 0.10 0.01 0.05 400 416 435 1.1:1 0.26 0.43 0.22 0.29 0.06 0.34 0.15 0.27 0.41 0.78 0.31 0.29 0.21 0.44 0.16 0.32 0.95 1.42 0.19 -0.11 774 400 500 572 416 483 400 565 2:1 0.10 0.64 1500 1820 0.12 0.53 0.69 2.87 0.21 0.15 1.27 0.87 0.40 0.40 1.65 4.33 0.41 0.03 1.37 1.52 0.52 0.93 1 232 1 201 669 575 665 Per capita GDP 667 418 667 Population 0.77 2.07 1870 GDP 1974 2431 1.32 1,81 1.48 0.38 1.81 1.15 0.64 1.30 737 543 698 917 444 0.95 0.55 1.64 1.21 0.75 0.80 867 5:1 2.10 3.92 2.44 Table 3-1b. Levels of Per Capita GDP and Interregional Spreads, 1000-1998 (1990 international dollars) 0.94 3.48 2.37 1.40 2.11 1 387 640 1 511 1501 0.76 1.55 0.89 585 -0.02 1.42 1 510 9:1 1.50 1.02 0.91 0.42 1.25 1.31 0.92 1.97 0.34 1.65 0.93 1913 1950 3:473 5 257 1.19 2.81 2.21 0.90 3.43 1.84 2.69 1.85 4.08 2.44 8.05 2.92 2.52 3.49 2.07 2.93 2114 15:1 0.70 1.55 1.15 2.19 2.73 1.31 2.33 1.92 4.81 4.03 9.29 5.18 5.33 4.84 4.45 4.91 1973 11-534 16 172 11 439 1231 4 594 9288 1926 635 2554 4531 2601 5729 852 1.365 4104 13:1 1.78 1.94 2.34 3.54 0.99 -1.10 0.01 1.33 0.32 1.02 0.61 1.86 2.01 0.54 2.73 1.66 2.11 2.98 2.97 5.46 3.02 -0.56 2.74 3.01 1998 17921 26 146 20 413 2.936 5 795 4354 1368 5.709 19:1