Economic Growth in Postwar America: Looking At GDP
I wanted to bring a discussion from comments into a post so we could see all the pretty pictures.
Jazzbumpa: “since roughly 1980 … GDP growth has been in decline”
Chris T: “It’s true annual growth rates have slowed, but so has the decline in GDP during recessions (at least prior to the most recent one).”
Chris shares the following graphs. (I’ve tweaked slightly — titles, axis labels.) They look pretty much the same:
Which prompted me to create the following, because GDP/capita is really the salient measure. (I thought bars better represented the discrete nature of the data points.)
First, annual changes:
It looks generally higher at the left, but Chris is right: look at all the negatives. Between ’84 and ’07, there’s only one negative. That’s partially because inflation was so tame. (Remember, these are inflation-adjusted figures.)
Here it is smoothed using ten-year rolling averages:
This gives the same immediate impression as Chris’s graphs: growth was generally faster in the first half of the post-war era, especially 1963-74.
I’m not a big fan of writing stories based on eyeballed time-series graphs, but here I go:
Jazzbumpa’s not really right about GDP growth having “been in decline” since 1980. It’s just been generally lower (until recently).
There’s that huge trough for roughly ’73-’83. It’s partially because these are all inflation-adjusted numbers, and inflation was high then, devouring nominal growth.
If I could choose when to be born based purely on this graph, I’d choose ’64. Fast growth for the next ten years, and when you hit the job market in ’82 or ’85, things are poised for quite reasonable growth.