Lane Kenworthy writes elegantly on the topic of growth and development in the form of changes to median income, and produces the following fascinating chart:
Prof. Kenworthy explains it:
"Between 1947 and 1973, GDP per family increased at a rate of 2.6% per year and median family income grew at 2.7% per year. From 1973 to 2007, GDP per family increased at 1.7% per year, but median family income grew at just 0.7% per year.
And note the absolute numbers: GDP per family rose by $52,000 during 1947-73 and then by $82,000 during 1973-2007. Median family income increased by $26,000 during 1947-73 but then by just $13,000 in 1973-2007.
Median family income was $64,000 in 2007. Had it kept pace with GDP per family since the mid-1970s, it instead would have been around $90,000."
We'll be looking at growth and development in Week 3 in International Monetary Economics, so this post is well worth a read as a primer.