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The Corner

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Math Is Hard



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Or, at least, it gets harder for me the older I get. So I might be wrong about this, but on reading this passage from Fareed Zakaria I think he is making a mistake:

Some have seized on the fact that emerging markets are slumping to argue that the era of Western dominance isn’t over yet. But the rise of the non-Western world . . . is a broad and deep trend that is likely to endure.

For some countries, the current economic crisis could actually accelerate the process. For the past two decades, for example, China has grown at approximately 9 percent a year and the United States at 3 percent. For the next few years, American growth will likely be 1 percent and China’s, by the most conservative estimates, 5 percent. So, China was growing three times as fast as the United States but will now grow five times as fast, which only brings closer the date when the Chinese economy will equal in size that of the United States.

Again, I could be wrong about this, but it seems as though the relevant ratios aren’t 9/3 vs. 5/1 but rather 1.09/1.03 vs. 1.05/1.01. If I’m right, then the US-China gap shrinks faster under Zakaria’s high-growth scenario.

Update: Reader TJM ran the numbers and found that I somehow got it right. “In the high growth scenario, based on current GDP (2.9 trillion vs. 14.3 trillion) China overtakes the US in 30 years. In the low growth scenaro, China overtakes the US in 43 years.”



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