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Ockham’s Razor and Economic Growth: How Long Can Fast Economic Growth Last?

Author

Listed:
  • Tomi Ovaska

    (Youngstown State University)

  • Albert Sumell

    (Youngstown State University)

Abstract

Economies can grow very fast, but only for so long. How long is that? Guided by Ockham’s Razor, the simplest way to answer the question is to investigate the economic performances of the past. Using GDP per capita (PPP-adjusted, 2017 USD) data from the Gapminder Foundation for 195 countries from 1800 to 2022, this study examines episodes of fast economic growth through absolute and relative growth rates, and performance across different development stages. The results suggest that maintaining high growth rates over long periods is exceedingly rare. Historically, extremely rapid growth (>8% annually) has persisted for at most 50 years, and moderately high growth (4–8% annually) for up to 70 years. Eventually, all countries converge toward lower long-run averages, typically around 1–2% annually. These historical patterns provide a transparent benchmark for understanding the limits of fast growth, especially for today’s emerging economies approaching high-income status.

Suggested Citation

  • Tomi Ovaska & Albert Sumell, 2025. "Ockham’s Razor and Economic Growth: How Long Can Fast Economic Growth Last?," Journal of Economic Insight, Missouri Valley Economic Association, vol. 51(2), pages 67-94.
    • Handle: RePEc:mve:journl:v:51:y:2025:i:2:p:67-94
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    More about this item

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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