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ECON 309 Winter 2022

1.  (2 points) Suppose RGDP per capita in Canada is currently $58,000, in 2019 dollars.

(a) If it grows at a constant rate of 2.5% per year, what will RGDP per capita be in

the year 2037 (15 years from now)?

(b)  Growing at an average annual rate of 2.5%,  how many years will it take for

RGDP per capita to double? How many years would it take if RGDP per capita is growing instead at 3.0% per year?

2.  (1 point) In a sentence, and in your own words, what is the Maddison Project Database?

3.  (9 points) Economists consider the current era of modern economic growth—in which, in advanced economies, RGDPpc is typically rising over time (aside from brief, un- expected periods of financial crisis or pandemic)—to have begun in the early  19th century, stemming largely from the British Industrial Revolution.

(a) To see why, consider the data for the United Kingdom.  How does average an-

nual RGDPpc growth for the period prior to 1800 compare to that from 1800 to 2018? How does the difference in growth rates before and after 1800 relate to the description of modern economic growth given above?

(b) The pre-1800 British experience is not unique or peculiar. To see why economic

historians believe this is true (construction of this data obviously required a lot of estimation!), compute the 400 year growth rate of RDGPpc for China, Italy, and Sweden between 1400 and 1800.

(c) To see how advanced economies differ from others, compute the average annual growth rate of RDGPpc, from 1900 (or earliest year available) to 2018, for the United Kingdom, India, and Malawi.

4.  (8 points) Small differences in annual growth rates can result in big differences in out- comes over time because of compounding. This can be seen from comparing Argentina and Canada, two countries that were pretty similar in a number of respects toward the end of the 19th century.

(a) Averaged over 1875-1879, Argentina’s RGDPpc was about 2664, while Canada’s

was about 2727.  In percentage terms, how much bigger was Canada’s RGDPpc compared to Argentina?

(b) Averaged over 2014-2018, how much bigger was Canada’s RGDPpc compared to

Argentina in percentage terms?

(c) What was the average annual growth rate of RGDPpc for Canada between 1875 and 2018? How about for Argentina?

(d)  Singapore is referred to as one of the  Asian  Tiger  economies.   What was its average annual growth rate of RGDPpc between 1958 and 2018? If Canada had experienced the same growth starting in 1958, what would Canada’s RGDPpc be in 2018?