ECON 102 Chapter Notes - Chapter 7: Per Capita Income, Deng Xiaoping, Reuters
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Data on real gdp per person show that living standards vary widely from country to country. 6 times higher than that of china. 12 times higher than that of india. Life expectancy at birth: 84. 46 years vs 55. 68 years. Per capita income (ppp): ,100 vs . 10% surge in economy on average per year since 1978. 1978 reformist leader deng xiaoping announces open door policy. 1984 opens up 14 cities & 3 regions to foreign investment. 1990 stock markets open in shanghai and shenzhen. 2005 600 million lifted out of poverty since 1981 (according to world bank) 2010 china overtakes japan as second largest economy. Explaining the large variation in living standards around the world is, in one sense, very easy. As we will see, the explanation can be summarized in a single word: productivity. Productivity: the quantity of goods and services produced from each hour of a worker"s time. Productivity is the key determinant of living standards.
