Volatility and economic growth in the twentieth Century

Abstract

The twentieth century was a period of outstanding economic growth together with an unequal income distribution. This paper analyses the international distribution of growth rates and its dynamics during the twentieth century. We show that the whole century is characterized by a high heterogeneity in the distribution of GDP per capita growth rates, which is re ected in di erent shapes and a persistent asymmetry of the distributions at the regional level and for countries of di erent development levels. We nd that in the context of the global con icts that characterized the rst half of the twentieth century and involved mainly large economies, the well-known negative scale relation between volatility and size of countries is not signi cant. After the year 1956, a redistribution of volatility leads to a signi cant negative scale-relation, which has been recently considered as a robust feature of the evolution of economic organizations. Our results contribute with more empirical facts that call the attention to traditional macroeconomic theories to better explain the underlying complexity of the growth process and sheds light on its historical evolution.