Figure 13.1 France, share of income invested, 1950–2010, per cent

France, share of income invested (%), 1950-2010

26.52

16.29

0

5

10

15

20

25

30

1950 1960 1970 1980 1990 2000 2010year

inco

me

shar

e in

vest

ed average

Data source: Heston, Summers, and Aten (2012).

Figure 13.2 Income levels and capital accumulation (Solow)

0

1

2

3

4

5

0 5 10 15 20 25 30 35 40capital-labour ratio

outp

ut

Equilibrium

capital available from savings = investment

capital needed for depreciation and population growth

A

B

k*

Figure 13.3 USA: GDP per capita, 1870-2010 (log scale)

USA; per capita GDP, 1870-2010 (log scale)

1,000

10,000

100,000

1870 1890 1910 1930 1950 1970 1990 2010year

per

capi

ta G

DP

Data sources: Maddison (2010) for the period 1870-2008, combined with Heston, Summers, and Aten (2012) rgdpch for 2009 and 2010, normalized at 2008. Notes: measured in international 1990 Geary-Khamis $; the thin line is a trend line

Figure 13.4 Income per capita and secondary schooling rate, 2010

GDP per capita and secondary schooling, 2010

100

1,000

10,000

100,000

0 20 40 60 80 100 120 140secondary schooling rate (gross)

GD

P p

er c

apita

(lo

g sc

ale)

Niger

Australia

Data source: World Development Indicators online; GDP per capita measured in constant 2000 US $.

Figure 13.5 Income per capita and years of schooling; World Bank regions, 1960-2010

Years of schooling and per capita income

100

1,000

10,000

0 1 2 3 4 5 6 7 8 9

years of schooling

per

capi

ta in

com

e (lo

g sc

ale)

SSA

EAP

LAC

ECA

MENA

SA

Data sources: Cohen and Soto (2007) for years of schooling (population 15-64; population-weighted averages) and World Bank Development Indicators online for per capita income (GDP in constant 2000 dollars); World Bank regions (developing countries only) are: MENA = Middle East & North Africa; LAC = Latin America & Caribbean; SSA = Sub-Sahara Africa; SA = South Asia; EAP = East Asia & Pacific; ECA = Eastern Europe & Central Asia; data for 1960, 1970, 1980, 1990, 2000, 2010

Figure 13.6 Japan and Indonesia: income per capita, 1970-2010

Japan and Indonesia; per capita income 1870-2010

100

1,000

10,000

100,000

1870 1890 1910 1930 1950 1970 1990 2010year

per

capi

ta in

com

e (lo

g sc

ale)

Japan

trendline Japan

trendline Indonesia

Indonesia

Data sources: see Figure 13.3.

South 4d

c

bb

a

North 1 North 2

South 3

E4

FDI24FDI13

FDI14

FDI23

Trade24Trade13

Trade23Trade14

Trade34

North-South trade-related spillover

North-South FDI-related spillover

South-South trade-related spillover

E3

education-related spillover

Figure 13.7 Overview of technology spillovers in an open developing economy

Figure 13.8 Intertemporal adjustments in Singapore, 1972–2010, current account balance, per cent of GDP

Singapore; current account balance, 1972-2010 (% of GDP)

28.73

-19.58

-30

-20

-10

0

10

20

30

1970 1975 1980 1985 1990 1995 2000 2005 2010

year

curr

ent

acco

unt

bala

nce

Data source: World Bank development indicators online

Figure 13.9 Rapid growth in Europe – Asia trade, 1500-1800

Number of ships sailing to Asia from Europe, 1500-1800

0

500

1,000

1,500

2,000

2,500

3,000

1500-99 1600-1700 1701-1800

Portugal Netherlands England France Other

Data source: Maddison (2001); “Other” refers to ships of the Danish, Swedish trading companies, and the Ostend company

Figure 13.10 Multinational trade composition

a. Portugal; Estado da India (per cent by weight)

0

20

40

60

80

Pepper MoluccanSpices

OtherSpices

Textiles Indigo Other

1513-19

1608-10

b. Netherlands; Dutch East India Company (VOC,per cent by value)

0

20

40

60

80

Pepper Other Spices Textiles &Raw Silk

Coffee & Tea Other

1619-21

1778-801

c. England; English East India Company (EIC, per cent by value)

0

20

40

60

80

Pepper Textiles Raw Silk Tea Other

1668-70

1758-60

Data source: Maddison (2001).

Figure 13.11 A Dutch ship in Nagasaki, 1859

Text (right to left): A long time ago the Dutch already were very skilled in navigation, and Dutch ships sailed around the world. The Dutch were very well versed in shipbuilding and of how to use ships profitably for foreign markets. They chose good materials and worked like when building up stone walls; they used iron nails and filled up cracks with tar and hemp.

In the fourth month they sailed from their country (from Indonesia, the journey from Indonesia lasted much longer) and in the sixth month they arrived here.

When (the ship arrives) in Nagasaki and the cannons, which are placed side by side, are fired, clouds appear and make the ship invisible. When the smoke has risen, the sails that had been visible in large numbers suddenly appear to have been rolled up.

Upon departure they also fire cannons, and before the smoke has risen they have already hoisted the sails, astonishing the spectators.

Their manoeuvring is truly miraculously fast and mysterious.

Oranda fune no zu, 1859. Artist, Yoshitora; Publisher, Yokohama, Shimaya, 36.5 × 25.5 cm. Inv.nr.: NEHA SC 477 nr. 31, IISG.

Figure 13.12 The Japanese economy, 1500–2008, GDP & exports, percent of world total

Japan: GDP and exports, percent of world total

0

3

6

9

1500 1600 1700 1800 1900 2000

Portuguese landing

Dutch landing

treaty of Kanagawa WW II

end of shogun era

Portuguese expelled

GDP

export

Data sources: Maddison (2001, 2010) and World Development Indicators online for 2008 share of world exports (in current US dollars).

Figure 13.13 Developments in Chinese income and trade flows, 1960–2011 Economic developments in China, 1960-2011

1

10

100

1960 1970 1980 1990 2000 2010

0

25

50

GDP/cap (% of world average, log scale, left)

Export of goods and services (% of GDP, right scale)

GLF CR Mao

ER SP&TS GR

Data source: World Development Indicators online; GDP per capita measured in constant 2000 US dollars; GLF = Great Leap Forward; CR = Cultural Revolution; Mao = Mao’s death; ER = Economic Reform; SP&TS = Student protests on Tiananmen Square; GR = start Great Recession.

Figure 13.14 The Dupuit triangle

quantity

price

demand

Dupuit triangle

q

p

qmax

pmax

O

A

quantity

price

demand

Dupuit triangle

q

p

qmax

pmax

O

A

Figure 13.15 Dynamic costs of trade restrictions

Welfare costs of an increase in trade restrictions

50

25

8

88

17

45

0

100

0 11-exp(-T)

wel

fare

cos

ts (

per

cent

)

T1 = 0.10

T'1 = 0.20

static costs = Romer unexpected costs

dynamic costs

Romer expected costs

Source: van Marrewijk and Berden (2007)