Real GDP Per Capita

Real GDP Per Capita is displayed on the Y – Axis in the graph. It represents the amount of real GDP produced per year per person. During recessions each person's real GDP will go down and during booms each person's real GDP will go up. Each of the highlighted periods represent a recession and therefore the real GDP per person goes down. The periods in which the graph was at its peak in the economy is represented at the top of the business cycle. Since real GDP reflects the productivity of a single person, this productivity reflects changes in things like capital available to people, education, and technological change. As time progresses, these all improve and therefore the GDP per capita grows in the long run. Because of this, the lowest point of the graph is in the earliest period and the highest point of the graph is in the latest period. There are also periods of steady decline not associated with recessions and this may reflect a decrease in the amount of capital available to laborers. These declines can be seen in the late 80s with the issue of the oil crisis.