Puzzling Properties of the Historical Growth Rate of Income Per Capita Explained
Abstract. Galor discovered many mysteries of the growth process. He lists them in his Unified Growth Theory and wonders how they can be explained. Close inspection of his mysteries reveals that they are of his own creation. They do not exist. One of his claimed mysteries is the mystery of the alleged sudden spurt in the growth rate of income per capita and in the growth of population. This sudden spurt never happened. Precisely the same data, which were used in support of the Unified Growth Theory are in fact in its direct contradiction. They show that the created mysteries of growth do not exist. The difference between the diametrically opposite conclusions is that in order to support the Unified Growth Theory and to create the mysteries of growth data were appropriately manipulated and distorted but the contradicting evidence is based on their rigorous analysis. The mechanism of the historical economic growth and of the growth of human population is yet to be explained but it would be unproductive to try to look for explanations in the Unified Growth Theory. However, the problem is much deeper than just the examination of this theory. Demographic Growth Theory is based on the incorrect but deeply entrenched postulates developed by accretion over many years and now generally accepted in the economic and demographic research, postulates revolving around the concept of Malthusian stagnation and around a transition from stagnation to growth. The study presented here and earlier similar publications show that these postulates need to be replaced by interpretations based on the mathematical analysis of data and on the correct understanding of hyperbolic distributions.
Keywords. Economic growth, Population growth, Growth rates, Gross Domestic Product, Income per capita, Unified Growth Theory, Hyperbolic growth
JEL.A10, A12, C02, C12, C50, F01, Y80.
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