US growth rate 1950 to 1990 to 2020

Abstract

What do the Maddison Data say about the rate of economic growth in the US between 1950, 1990, and 2020? Thomas Piketty (2021, p. 139) says, “In the United States, the national income per inhabitant rose at a rate … of 2.2% between 1950 to 1990 when the top tax rate reached on average 72%. The top rate was then cut in half, with the announced objective of boosting growth. But in fact, growth fell by half, to 1.1% per annum between 1990 and 2020”.

Extract the data

library(MaddisonData)
str(US <- subset(MaddisonData, ISO=='USA'))

## tibble [231 × 4] (S3: tbl_df/tbl/data.frame)
##  $ ISO  : chr [1:231] "USA" "USA" "USA" "USA" ...
##  $ year : num [1:231] 1 1000 1500 1600 1650 ...
##  $ gdppc: num [1:231] NA NA NA NA 897 ...
##  $ pop  : num [1:231] 680 1300 2000 1500 NA 1000 NA NA NA NA ...

(US1950_1990_2020 <- subset(US, year %in% c(1950, 1990, 2020)))

## # A tibble: 3 × 4
##   ISO    year  gdppc     pop
##   <chr> <dbl>  <dbl>   <dbl>
## 1 USA    1950 15240  152271 
## 2 USA    1990 36982  250132.
## 3 USA    2020 54379. 331512

(USdif <- with(US1950_1990_2020, data.frame(
  Next = tail(gdppc, -1), Last=head(gdppc, -1), dyr=diff(year))))

##       Next  Last dyr
## 1 36982.00 15240  40
## 2 54379.21 36982  30

(GrowthRt <- with(USdif, (Next/Last)^(1/dyr))-1)

## [1] 0.02241011 0.01293462

Bibliography

Thomas Piketty (2022) A Brief History of Equality (Belknap Press)