The next 50 years will see major changes in country shares in world GDP. On the basis of 2005 purchasing power parities (PPPs), China is projected to surpass the Euro Area in a year or so and the United States in a few more years, to become the largest economy in the world, and India is projected to surpass Japan in the next year or two and the Euro area in about 20 years. Credit: OECD Economic convergence is based on the concept of diminishing return. With developing countries having a potential to grow at a faster rate than developed countries because diminishing returns (in particular, to capital) are not as strong as in capital-rich countries. Article featured image: Credit: Dewald Aukema © Chimerica/BBC/PBS (http://video.pbs.org/video/2223962069/)
At the 2013 Global Empowerment Meeting, Niall Ferguson attempts to make sense of the current economic situation from a historical perspective. Are we re-visiting the 1970s when rich countries stagnated in an economic morass, while natural resource exporters boomed? And what is to come: will our era be followed by a decade like the 1980s, when developed countries rebounded and natural resource economies collapsed? Or, are there other historical parallels more enlightening for today’s context?
The Center for International Development (CID) at Harvard University is a university-wide center that works to advance the understanding of development challenges and offer viable solutions to problems of global poverty.