Since NAFTA, Mexican real GDP has grown at 3.6 per year, and exports have boomed, going from 10 of GDP in 1990 and 17 of GDP in 1999 to 28 of GDP today. Next year, Mexico s real exports will be five times what they were in 1990.

GDP link was also introduced to allow extra payments in case actual real GDP exceeded the base case GDP as projected by the Argentine Government.

1 In 2004, Guatemala reverted to real per capita GDP growth.

This is attributable to the lower rate of increase in real GDP.

In the occupied Palestinian territories, the real GDP fell below its 1986 level.

The IMF initially projected that Greece s real (inflation adjusted) GDP would contract by around 5 over the 2010 2011 period, stabilize in 2012, and grow thereafter. In fact, real GDP fell 25 , and did not recover.

Real GDP per capita (in 1992 prices) declined from 890 to 116 in 2004.

Moreover, low inflation and periods of deflation did not prevent real incomes from rising in Japan. From 1999 to 2013, real per capita GDP rose at an annual rate of about 1 (which reflected a more modest rise of real GDP and an actual decline in population).

Real GDP growth continued at a modest pace in 2004 in the Pacific island economies.

Although government statisticians do their best to gauge the rise in real GDP through time, there are two problems that are very difficult to overcome in measuring real incomes increases in the quality of goods and services, and the introduction of new ones. I believe that both of these problems cause the official measure of real GDP growth to understate the true growth of the standard of living that real GDP is supposed to indicate.

Gordon also points to the recent slowdown in real (inflation adjusted) GDP growth. According to official US statistics, real GDP per worker grew at an average annual rate of 2.3 from 1891 to 1972, but by only 1.5 since then.

Real GDP and estimates of growth rates in the ESCWA region at constant 2000 prices, 2001 2005

The more diversified economies and the Gulf Cooperation Council enjoyed an upturn in real GDP levels (see table).

The Economist Intelligence Unit reported that the gross domestic product (GDP) of the British Virgin Islands amounts to 827 million in 2003 with real GDP growth of 3.2 per cent.

However, between 1996 and 1998 Mozambique's GDP experienced a significant growth, reaching a real annual average of 11 1.

As a result, real GDP grew at 1.6 per cent in 2004, down from 6.1 per cent in 2003.

China s economy has certainly become more unstable, with major slowdowns in real GDP growth in 2009 and again in 2012. Its imbalances have gotten worse as well, with the investment share of GDP approaching 50 and private consumption falling below 35 of GDP.

However, the report states that most least developed countries have fallen further behind in real growth in gross domestic product (GDP).

Argentina s long term GDP growth has been disappointing. In fact, real GDP per capita declined 15 over the 25 year period from 1965 to 1990 a period that saw some Asian economies quintuple in size.

Japanese real per capita GDP growth averaged 3.9 a year in the 1980 s, but only 1.4 since 1990. If real per capita GDP growth had continued after 1990 at the rate of the 1980 s, Japan s economy would be 60 larger than it is today implying losses in the trillions of dollars.

Some will object that there is little point in creating GDP linked bonds in advanced countries, because there is little uncertainty about GDP growth there. However, even in the relative calm of the post war era, long term real GDP growth in advanced countries has been rather variable.

Quarter after quarter the macroeconomic news from the United States teaches the same lesson real GDP growth at a sustained rate of 3 per year is not enough to increase America's employment level. Not even real GDP growth at a sustained annual rate of 4 is sufficient to increase the share of American adults who have jobs.

Per capita GDP (excluding Iraq and Palestine) increased by 2.3 per cent in real terms, while average population growth was estimated at 2.4 per cent.

But the 8 real GDP growth recorded in 2004 might encourage some to expect a surge in economic performance, as has occurred elsewhere in the world.

East Asia as a whole will surpass the US in terms of aggregate GDP by 2015, with China contributing the highest proportion of the total. China s GDP is projected to catch up to that of the US and Europe in 10 15 years, at which point (if not sooner) both Chinese and US real GDP will exceed 25 trillion (in 2012 prices), more than three times China s current GDP.

On one hand, China should not try to eliminate overcapacity by maintaining the high growth rate of real estate investment. While investment in social housing should be welcomed, real estate investment, currently running at 10 13 of GDP, is already far too high.

But real per capita GDP in the US is now three times higher than it was in 1958. What have people been spending all that extra money on?

The key to restoring China s GDP growth is, therefore, returning fixed asset investment growth to at least 25 . With a new round of stimulus, China s excess production capacity and underused outlays (for example, built up real estate assets) could be mobilized immediately, restoring 9 annual GDP growth.

Rich people increasingly populate the most expensive cities. Real GDP has been increasing at around 3 a year in advanced countries, and even faster recently in many emerging countries.

French production costs are high, but Greek costs are higher. Despite the considerable decline in Greek (and Italian and Spanish) real GDP since 2007, adjustment is far from complete.

The impact of a sharp decline in real estate prices would be far reaching. After all, property collateral is the bedrock of the Chinese financial system, with estimates of banks direct and indirect exposure to real estate ranging from 66 to 89 of GDP.

The economy therefore limped along year after year, with real GDP in the final quarter of each year less than 2 higher than it had been a year earlier. Employment grew more slowly than the population, and annual real wage increases averaged only about 1 .

Among the group of developed countries, the United States of America was once more the main engine for global growth, with real GDP increasing by more than 4 per cent.

Second, persistent weakness in consumption and GDP growth puts the US economy on a much weaker growth trajectory than that which is built into the government s long term budget estimates. The Congressional Budget Office is assuming 3.4 average growth in real GDP over the 2013 to 2016 period.

It is likely to rise to more than 60 of GDP by the end of 2010, with the debt to GDP ratio continuing to increase. The resulting increase in real long term interest rates will reduce all forms of interest sensitive spending, adding further to the economy s weakness.

According to the International Monetary Fund, G 20 countries earmarked 17.6 of their GDP on average to supporting their banking systems, although they spent much less. Likewise, spending to stimulate the real economy totaled only 0.5 of GDP in 2008, 1.5 in 2009, and probably 1 this year.

Instead of dropping to 110 as planned, the public debt to GDP ratio has increased to 170 . Annual per capita real income contracted 4.8 , on average, over the last six years.

One surprise is that there has been relatively little change in the ranking of countries by real per capita GDP since 2000. Despite all the talk about the Chinese economic miracle, China s ranking has risen only slightly, from 61st out of 82 countries in 2000 to 60th in 2004 even though per capita real GDP grew by 44 between 2000 and 2004, or 9.6 a year, the highest of the major countries.

Some of the worst performers among the major countries are Israel (a beleaguered country, with real per capita GDP up only 2 between 2000 and 2004) and Argentina (hit by a terrible financial crisis in 2001 2, up only 9 between 2000 and 2004). Economic performance in several Latin American countries was relatively weak in this period, with Uruguay s real GDP per capita actually recording a fall by a fraction of a percent.

The remaining 900 billion spilled over into financial markets, helping to spur a trebling of the US equity market. Meanwhile, the real economy eked out a decidedly subpar recovery, with real GDP growth holding to a 2.3 trajectory fully two percentage points below the 4.3 norm of past cycles.

In real terms, wages no longer rose (indeed, the average real wage has been stagnant for 25 years in the US), and a growing share of manpower (currently around 15 ) was without steady employment. Everywhere, the share of wages and incomes began to fall as a proportion of GDP.

For Greece, with an overall deficit of 4.1 of GDP and a debt GDP ratio of 170 , the debt ratio would fall if the combination of inflation and real (inflation adjusted) GDP growth exceeded 2.4 . Stated differently, now that Greece has achieved a zero primary budget deficit, its debt burden will decline if its nominal growth rate exceeds the average interest that it pays on its government debt.

Economic growth rates reveal the same gap. From 1978 to 2003, annual real GDP growth in China averaged 8.1 while growth in Mexico the fastest in Latin America, barely reached 1 a year.

Real GDP has been increasing at around 3 a year in advanced countries, and even faster recently in many emerging countries. And, of course, we aren t getting any more land in these cities.

But the widening of the trade deficit had no negative effect on output and employment. Real (inflation adjusted) GDP growth averaged 4.3 during 1996 2000, productivity increased by 2.5 per year, and workers received their share of those gains as real compensation per hour rose at a 2.2 annual pace.