How Powerfully and Rapidly Are Developing Countries Catching Up with the Advanced Economies?

Abstract

The article, based on a number of author’s calculations and models, shows that if in the advanced economies (AEs), despite their preservation of leading positions in modern technologies, due to the loss of their demographic dividend, deindustrialization and contraction in the rate of capital formation, there is a cascade slowdown in the growth rate of per capita GDP and total factor productivity (TFP), the situation in developing countries (DCs) is on the whole more optimistic. Although (a) many DCS are experiencing acute social problems, (b) AEs are pursuing a policy of detainment of the growth of a number of DCs, they on the whole, thanks to the success of China, India, other, predominantly Asian DCs that have implemented pragmatic reforms and export-oriented industrialization, have made significant progress. In the last two decades DCs on the whole outperformed the AEs in terms of capital investment efficiency by 2.5 times, in average growth rates of industrial production and TFP - by five and two times, respectively. Their share in world GDP, which has risen by a factor of 1.5 to 3/5 over the past forty years, may, according to available forecasts, increase to ¾ by the middle of the century. In about three decades, the ratio of economic power of the countries of the East and the South and the countries of the West (in favor of the former) will quite possibly be approximately the same as it was in the planetary economy before the industrial revolution and colonial enslavement of the former by the latter.