From 1870 to 1913, world capita GDP rose 1.3% per year compared with 0.5% in 1820-70. Two world wars, the collapse of capital flows, migration and trade shattered the old economic order between 1913 and 1950, though by harnessing technological developments – electricity, automobiles, aviation and chemistry, etc. – the United States had become the world leader in terms of productivity and per capita income. The world economy as a whole performed better from 1950 to 2000 than at any time before. Real per capita income rose by 2.1% a year, compared with 0.9% from 1820-1950.

The golden age, from 1950 to 1973, saw a degree of convergence between the US and other advanced capitalist countries (western Europe and Japan) coinciding with a new liberal international order. Indeed, Japan, despite just having emerged from a decade of economic stagnation, has had the fastest growth, its per capita income growth increasing sixfold during the golden age, at 8% per year compared with 4% in western Europe.

Reference

Maddison A. (2003), The World Economy – A Millennial Perspective, OECD Development Centre.

©OECD Observer No 243, May 2004