Long-Run Economic Growth: End of Chapter Problems 2. The accompanying table show

Question

Long-Run Economic Growth: End of Chapter Problems 2. The accompanying table shows the average annual growth rate in real GDP per capita for Argentina, Ghana, and South Korea, using data from World Bank, World Development Indicators, for the past few decades. a. For the 10-year periods indicated, use the Rule of 70 to calculate how long it would take for that country's real GDP per capita to double. Round your answers to one place after the decimal point. Average annual growth rate of real GDP per capita (millions per year) Years Argentina Ghana South Korea 1965-1975| 192% 1975-1985-1.42-2.29 7.08 1985-19951.541.708.06 1995-2005 1.14 2.164.28 |-1.13%| 8.29% 2005 2015 3.11 4.453.02 Argentina, using the average annual growth rate from 1985-1995 Agentina's GDP will double in Ghana, using the average annual growth rate from 2005-2015

Explanation / Answer

According to rule to 70, GDP gets doubled in the time period that results when the rate of growth is divided by 70.

a) For Argentina, the required number of years for doubling of GDP = 70/1.54 = 45.5 years

b) For Ghana, the required number of years for doubling of GDP = 70/4.45 = 15.7 years

c) For South Korea, the required number of years for doubling of GDP = 70/7.08 = 9.9 years

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