Monday, July 10, 2023

How to Predict a Nation's GDP per Capita at r=.97 Using "Economic Freedom and average citizenry IQ -- plus slight tweaks from trading block membership and oil"

A repost from 2011 with a couple 2018 tweaks.

As noted in last week's post on Dyson setting up electric vehicle production in Singapore:

I like Singapore although it is a bit authoritarian.
The people are bright, usually the highest average I.Q. in the world, sometimes #2 to Hong Kong.
In the case of Singapore the I.Q. thing is especially interesting as their average is higher than that of any of the genetic pools the city-state draws from: the Chinese, Malay and Indian.

As a Malaysian Chinese businessman I know has told me, "We should never have let Singapore get away."

Another back-and-forth with Hong Kong is income/wealth. HK has more billionaires but Singapore has a higher average income.
And then there are the Gurkhas. More after the jump.
A repost from March 2011:
Via Next Big Future:

Per Capita GDP prediction method with 97% accuracy using economic freedom, average IQ, trading block membership and oil usage
...China average EF (Economic Freedom rank from Fraser Institute) index for 15 years is a 5.34, while its actual per capita GDP came in at $6,200. However, its current (2003) EF index is already up to a 6.0. Even if we just assumed that no more reforms occurred for the next 15 years, we'd still get just the next 15 years of 6.0 EF in China's economy. That projects to a Chinese per capita GDP of around $15,900 (those are real numbers, not nominal). But that's for 1.35 billion people. The added economic growth from this minimum expectation alone will be $13 trillion/year in GDP.

If we assume that China continues with deregulation and economic reforms, inching up in the high 7's on the EF Index (at the level of, say, the United Arab Emirates) such that its weighted EF average for the next 15 years is around a 7.0. China would then shoot up to a projected $22,362 per capita GDP, with an economic explosion of over $29 trillion total GDP per year -- well above that of the United States....
...The following is the chart of actual per capita GDP and that predicted by the simple process outlined above:
...The median amount of difference between actual and predicted per capita GDP was only $1,826....