How long does it take real GDP per person to double?

Quote:

Japan's real GDP was 525 trillion yen in 2009, and 535 trillion yen in 2010. Japan's population was 127.6 million in 2009 and 127.5 million in 2010. Calculate

a. The economic growth rate

b. The growth rate of real GDP per person.

c. The approximate number of years it takes for real GDP per person in Japan to double **if the real GDP economic growth rate returns to 3 percent** a year and the population growth rate is maintained.

Okay.

Answer to A is [(535-525)/525] * 100 = 1.9%

Answer to B is "Growth rate of real GDP - Growth rate of population".

The growth rate of population is [(127.5-127.6)/127.6] * 100 = -0.07837%.

Hence, the answer is 1.9% - (-0.07837%) = 1.97837% per person.

I need help with solving part c.

**My attempt:**

Use Rule of 70. First we have to recalculate the growth rate of real GDP per person since the economic growth rate is different.

Growth rate of real GDP per person = 3% - (-0.07837%) = 3.07837%

So the years it takes is 70 / 3.07837 = 22.74 years

Is this correct?

Thanks.

Re: How long does it take real GDP per person to double?

your method for b and c is based on approximations so its hard to comment. If those methods are allowed by your teacher then your answers are fine.

Re: How long does it take real GDP per person to double?

Hi SprinFn25,

Thanks.

Do you have another way to solve b and c?

Thanks!

Re: How long does it take real GDP per person to double?

without approximations:

**part b**

The growth in GDP per capita is:

$\displaystyle \frac{\frac{535}{127.5}}{\frac{525}{127.6}} -1 \approx 0.019846872$

**part c**

The growth in GDP per capita is:

$\displaystyle g = \frac{1.03}{\frac{127.5}{127.6}} -1 \approx 0.03080$

an exact formula for the doubling time is:

$\displaystyle \frac{\ln 2}{\ln(1 + g)} \approx 22.844$

derivation of the above formula is:

Re: How long does it take real GDP per person to double?

Quote:

Originally Posted by

**SpringFan25** without approximations:

**part b**
The growth in GDP per capita is:

$\displaystyle \frac{\frac{535}{127.5}}{\frac{525}{127.6}} -1 \approx 0.019846872$

**part c**
The growth in GDP per capita is:

$\displaystyle g = \frac{1.03}{\frac{127.5}{127.6}} -1 \approx 0.03080$

an exact formula for the doubling time is:

$\displaystyle \frac{\ln 2}{\ln(1 + g)} \approx 22.844$

derivation of the above formula is:

Thanks for sharing, this is perfect method.