Grown in China
China is growing—and so are the Chinese. According to official statistics, children in China are almost 2½ inches taller now than they were 30 years ago. The average Chinese citizen is still a lot shorter than the average American, but at the current rate of growth the difference may be largely gone in a couple of generations.
If that does happen, China will be following in Japan’s footsteps. Older Americans tend to think of the Japanese as short, but today young Japanese men are more than 5 inches taller on average than they were in 1900, which makes them almost as tall as their American counterparts.
There’s no mystery about why the Japanese grew taller—it’s because they grew richer. In the early twentieth century, Japan was a relatively poor country in which many families couldn’t afford to give their children adequate nutrition. As a result, their children grew up to be short adults. However, since World War II, Japan has become an economic powerhouse in which food is ample and young adults are much taller than before.
The same phenomenon is now happening in China. Although it continues to be a relatively poor country, China has made great economic strides over the past 30 years. Its recent history is probably the world’s most dramatic example of economic growth—a sustained increase in the productive capacity of an economy. Yet despite its impressive performance, China is currently playing catch-up with economically advanced countries like the United States and Japan. It’s still relatively poor because these other nations began their own processes of economic growth many decades ago—and in the case of the United States and European countries, more than a century ago.
Unlike a short-run increase in real GDP caused by an increase in aggregate demand or short-run aggregate supply, we’ll see that economic growth pushes the production possibilities curve outward and shifts the long-run aggregate supply curve to the right. Because economic growth is a long-run concept, we often refer to it as long-run economic growth for clarity. Many economists have argued that long-run economic growth—why it happens and how to achieve it—is the single most important issue in macroeconomics. In this section, we present some facts about long-run growth, look at the factors that economists believe determine its pace, examine how government policies can help or hinder growth, and address questions about the environmental sustainability of growth.
