** Economic Application: GDP growth**

One remarkable empirical regularity about the long-term GDP growth of developed economies is that GDP per capita grows at an approximately constant rate that does not diminish over time (Kaldor, 1957, *The Economic Journal*). The following application shows how geometric progressions can be a useful approximation in describing the long-term evolution of GDP given constant growth rates and how this approximation can be useful in answering several interesting related questions.

#### **Economic Application Exercise**

The following quiz allows you to test your understanding of the constant growth formula in the context of answering seveal different types of questions related to growth.

Economic Applications Quiz 4.1