Back to the future: Ireland versus Japan

In the previous post we mentioned the time history of the Japanese GDP per capita as a template of the future evolution in Ireland. In the 1980s, Japan was very similar to Ireland in between 1995 and 2005.  It demonstrated an outstanding real economic growth, which seemed to last forever. This growth ended in 1991, however, with the past twenty years of mediocre growth.  Ireland suffers the same decease and its fabulous growth ended in 2007. This break was foreseen in 2004 [1]. Figure 1 compares Japan and Ireland in sense of annual increment of real GDP per capita, G. We plot dG (annual) against G because of our empirical finding that dG must converge to constant:
dG=B or G(t)=G(t0) + Bt, where  B is constant and t is the elapsed time.
In Figure 1, the growth in the Japanese GDP per capita between $25000 and $32000 (2010 US dollars) is a template for the Irish growth between $25000 and $45,000. Therefore, we expect the future of real GDP per capita in Ireland to be unpleasant – it has to return to the average value (which is currently  $736) close to the Japanese one ($587).

Figure 1. Comparison of the Japanese and Irish GDP per capita between 1950 and 2010.

No comments:

Post a Comment