Economics Challenge Recap: How did the class do?

Apparently word is out that Taiwan is killing it.

Photo by Annie Spratt on Unsplash

There are several points to take away from Monday's GDP per capita challenge. First, let's take a look at the results. Each country is listed with their GDP per capita followed by the percentage of respondents that guessed each country.

Question 1:

United States ($75,180) or Japan ($48,813)

USA: 53%

Japan: 47%

~

Question 2:

Argentina ($26,074) or Albania ($17,858)

Argentina: 57%

Albania: 43%

~

Question 3: Ghana ($6,780) or Mozambique ($1,457)

Ghana: 50%

Mozambique: 50%

~

Question 4: Costa Rica ($24,837) or Vietnam ($13,075)

Costa Rica: 50%

Vietnam: 50%

~

Question 5: Taiwan ($69,500) or Portugal ($42,067)

Taiwan: 79%

Portugal: 21%

Comparing the US to Japan shows just how wealthy the United States is. A quick glance at the source I used for the GDP data sums it up nicely. The United States is the eighth wealthiest country in the world. More noticeably, every other country in the top ten is much smaller from a population standpoint (all have populations below 10 million people). For the United States to be both one of the wealthiest economies and one of the largest economies puts it in a class of its own. There is an annoying strand of thinking by Americans that "America is like a third-world country". It is not. The US is one of the wealthiest countries in the world, so much so that America is 50% wealthier than the very much first-world country of Japan. To put this in perspective, Japan is poorer than Mississippi from a GDP per capita perspective. Yet almost half of respondents thought Japan was wealthier.

Comparing Argentina to Albania shows a common thread to both; they are both much poorer than one would think. At the beginning of the 20th century, Argentina was one of the wealthiest countries in the world. It sounds absurd today, but the French even had a phrase, "Il est riche comme un Argentin!" or "He is as rich as an Argentine!" No one would be saying that now. Instead, Chile and Uruguay have passed Argentina to become the wealthiest countries in Latin America. Albania has also underperformed. Every other country with a significant coastline along the Adriatic Sea is considerably wealthier. Even Greece, which has been an economic basket case for years is twice as wealthy. This was the hardest question for me; I wouldn't have known the right answer without looking. Respondents agreed, with a 57%-43% split.

Ghana vs. Mozambique was included to give a sense of the spectrum that is Africa. Often, Africa is painted with one brush as a war-torn, ill-fed, drought-stricken disaster. And while parts of Africa are certainly in desperate need, that is by no means the entire continent. Mozambique is one of the poorest nations on Earth. They are currently dealing with an insurgency in the north and have some serious nutrition issues. Ghana, on the other hand, has been one of Africa's success stories. It is now classified as having a lower-middle income and has been a stable democracy for years. All is not great; Ghana just defaulted on its debt. But to lump Ghana in with Mozambique would be like lumping Mexico and the United States together. For anybody working in economic development this question was easy, but because the media give Africa a single story, respondents split it 50-50.

Costa Rica vs. Vietnam illustrates the diversity of emerging economies. Both countries have done relatively well over the last 30 years. The nations are stable, tourism is growing, and they punch above their weight culturally. Costa Rica, however, is doing much better. Now wealthier than Serbia and a top-tier tourism destination, I'll be excited to see how Costa Rica continues to develop. Comparing Costa Rica to Vietnam is tricky, so I’m not surprised to see the respondents split the two 50-50.

Portugal vs. Taiwan shows the difference between a laggard and a star economy. Portugal, like most of Western Europe, was once an economic powerhouse. Taiwan was a military dictatorship just 40 years ago. Today Portugal has stagnated and is now falling behind countries that were behind the Iron Curtain. Taiwan, along with South Korea, is the world's ultimate success story. It's wealthier than Sweden and continues to grow and a good clip. Great job to the respondents on this one. 79% of you said Taiwan. I thought I would be able to fool more of you by choosing a (relatively) poor Western European country and a wealthy East Asian one, but most of you knew better!

The wealth gap across the world is massive. The United States produces goods and services worth more than $75,000 per person per year. Mozambique less than $1,500. That gap is immense, and the experiences of living in those countries will vary immensely. I can’t even imagine what it would be like to an octogenarian who spent his whole life in Taiwan; it must be like living on a whole different planet.

Thanks to all those who completed the quiz.