Over the past 50 years, many countries have experienced an annual growth rate in real GDP per capita greater than that of the United States. Some examples are China, Japan, South Korea, and Taiwan. Does that mean the United States is regressing relative to other countries

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Orlando Kaiser

14 September, 10:58

Over the past 50 years, many countries have experienced an annual growth rate in real GDP per capita greater than that of the United States. Some examples are China, Japan, South Korea, and Taiwan. Does that mean the United States is regressing relative to other countries

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Boyd · Answer 1

No it doesn't mean that the US is regressing, this happens because it is much easier for poor countries to grow at faster rates than rich countries. When you are poor, a small increase in your salary will result in a large percent increase. E. g. your current salary is $20,000 per year, and you get a $2,000 increase which results in a 10% increase. If you earn $150,000 a year, to increase your salary by 10%, you would need $15,000.

This is happening to China since 20 years ago it was growing at more than 10% per year, but currently is going at only 6%.