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Quah (1996): Emerging Twin Peaks

Quah (1996): Emerging Twin Peaks. Forecasting the future of the WDI (by country). Quah’s Methology: Based on historical experience pp=probability of poor in 1960 staying poor in 2000 pr=probability of poor becoming rich rp=probability of rich becoming poor

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Quah (1996): Emerging Twin Peaks

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  1. Quah (1996): Emerging Twin Peaks

  2. Forecasting the future of the WDI (by country) • Quah’s Methology: Based on historical experience • pp=probability of poor in 1960 staying poor in 2000 • pr=probability of poor becoming rich • rp=probability of rich becoming poor • rr=probability of rich staying rich

  3. Forecasting the future of the WDI (by country) • Npoor(2040)=Npoor(2000)*pp+ Nrich(2000)*rp • Nrich(2040)=Npoor(2000)*pr+ Nrich(2000)*rr • Repeat the procedure infinite many times to get the ergodic (steady-state) distribution • Conclusion: depends on Venezuela and Trinidad-Tobago

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