We have a very simple and empirically correct concept of real economic growth based on the finding that annual increment of real GDP per capita is constant in the long run. All developed countries obey this empirical law, at least between 1950 and 2010.
Developing and emerging countries demonstrate various level of performance relative to developed countries. In the previous post we presented Brazil and Russia. These are two representatives of the BRIC. In this post we compare all four countries. Figure 1 depicts the differences between real GDP per capita in the USA and the BRIC countries. A positive slope indicates a poorer when expected performance – the line must be parallel to the x-axis for equivalent performance.
From Figure 1, one can easily decide that India and Brazil were under par (between 1990 and 2010) relative to the standard performance of the USA. China has been growing faster than expected in the 2010s and significantly reduced the gap. Russia had a period of very poor performance in the 1990s as associated with the transition to capitalist economic system. Since 1999, its performance was on a par with China. Obviously, a higher rate of growth in China was related to a lower level of GDP per capita.
Figure 1. The differences between real GDP per capita in the USA and the BRIC countries