Thursday, 10 February 2011

The art of prediction

or why you shouldn't make predictions - if you needed any more evidence on this point. This quote is from The Economist and considers the future of South and North Korea:
“Obviously, sooner or later the country must be reunited,” wrote Joan Robinson, a Cambridge economist, in 1977, “by absorbing the South into socialism.”
Reality has not been kind to Mrs Robinson. From the same article,
South Korea’s central bank reckons that North Korea’s annual income per person was only $960 in 2009, or about 5% of South Korea’s. (This estimate values the North’s output using South Korea’s prices and its exchange rate against the dollar.) This disparity dwarfs the income gap between the two Germanys on the eve of reunification.

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