The article examines the size distribution of changes in the gross domestic product (GDP) of 167 countries for the period of 1950 through 2011. Physicists and economists have studied the possibility that universal mechanisms exist which give rise to general laws governing the growth dynamics of firms and economics. A consensus developed in the literature that the distribution of GDP growth rates can be approximated by the Laplace distribution in the central part and power-law distributions in the tails. The article finds that the distribution of GDP growth rates can be fitted using the heavy-tailed Cauchy distribution for almost all countries. Importantly, this same finding was recently demonstrated for (1) the distribution of firm growth rates and (2) the distribution of firm economic profit rates. The results of the study invite research on dynamic models of competition in which firms’ growth rates, economic profit rates, and resulting changes in GDP follow a Cauchy distribution.
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- CE Director Dr. Michael A. Williams and CE co-authors Grace Baek, Yiyang Li, Leslie Y. Park and Wei Zhao publish an article entitled “Global evidence on the distribution of GDP growth rates” in Physica A: Statistical Mechanics and its Applications
CE Director Dr. Michael A. Williams and CE co-authors Grace Baek, Yiyang Li, Leslie Y. Park and Wei Zhao publish an article entitled “Global evidence on the distribution of GDP growth rates” in Physica A: Statistical Mechanics and its Applications
CE Director Dr. Michael A. Williams and CE co-authors Grace Baek, Yiyang Li, Leslie Y. Park and Wei Zhao
publish an article entitled “Global evidence on the distribution of GDP growth rates” in Physica A: Statistical Mechanics and its Applications.