Abstract
The chapter analyses the main factors contributing to the rapid demographic and economic expansion of the US economy in the years 1870–1913. The main focus is on the advantages associated to the existence of the frontier, with its abundant and partially untapped national resources. The frontier made possible to increase immigration flows and population very rapidly and to foster extensive and intensive investment, total wages, total consumption, and technological progress. In a few decades, the US economy could surpass and then distance the level of total Gross Domestic Product (in purchasing power parities) of advanced economies, such as the UK, Russia, France, and Germany, and of very large and populous countries such as China and India.
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- 1.
See Maddison (2001, 2003, 2007). Total GDP, though being a very rough and incomplete indicator, gives us an idea of the economic size of a country. The measures in PPP take into account the actual purchasing power of a currency in different countries and so they permit more reliable comparisons among countries than the ones based on official rates of exchange.
- 2.
See Maddison (2001), p. 261.
- 3.
See Maddison (2003), p. 263.
- 4.
On the importance of the frontier in the US economic development, see for example , Turner (1920), Williams (1961), Habakkuk (1962). For more general views on the main aspects of American economic development since 1870, see Beard and Beard (1921), North (1961), Kuznets (1966), Denison (1974), Valli (1978), Vaudagna (1981), Pianta (1988), Landes et al. (1991), Mammarella (2003), Teodori (2008), Gordon (2016).
- 5.
See Galbraith (1967).
- 6.
The rate of change of GDP is equal to the rate of change of population plus the rate of change of per capita GDP, plus the product of the two rates of change. Since last term is very small, for approximate calculations it is usually omitted.
- 7.
See Maddison (2001), p. 349. Total and per capita GDP and labor productivity are all calculated in PPP Geary Khamis (GK).
- 8.
On the particular characters of American democracy, see the classical book by Alexis de Tocqueville (1835–1840).
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Valli, V. (2018). The Birth of a Great Economic Power. In: The American Economy from Roosevelt to Trump. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-96953-4_1
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