Trillions gained and lost: Estimating the magnitude of growth episodes

Lant Pritchett, Kunal Sen, Sabyasachi Kar and Selim Raihan ()

Economic Modelling, 2016, vol. 55, issue C, 279-291

Abstract: An increasingly large literature in the empirics of growth has viewed economic growth as an ‘episodic phenomena’. We propose a new technique for measuring the total magnitude of a growth episode: the change in output per capita resulting from one structural break in the trend growth of output (acceleration or deceleration) to the next. Our method allows us to quantify the amount of income gain and loss during growth accelerations and growth decelerations. We show that the income gains and losses are staggering in magnitude, often multiples of the level of income at the start of the growth episode. The top 20 growth accelerations have a net present value (NPV) magnitude of 30 trillion dollars—twice the US GDP. The top 20 growth decelerations account for 35 trillion dollars less in NPV of output. What explains such ‘staggering’ gains and losses in income over relatively short periods is the key question that future research on economic growth should try and address.

Keywords: Episode magnitude; Growth episode; Acceleration; Deceleration; Net present value (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999316300311
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Trillions Gained and Lost: Estimating the Magnitude of Growth Episodes (2014)
Working Paper: Trillions Gained and Lost: Estimating the Magnitude of Growth Episodes (2014)
Working Paper: Trillions gained and lost. Estimating the magnitude of growth episodes (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:55:y:2016:i:c:p:279-291

DOI: 10.1016/j.econmod.2016.02.020

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().