John Cassidy, “What’s Happening in 2014? Twelve Questions Answered,” The New Yorker, 3 January 2014
9. Will the Chinese economic miracle continue? Yes. After thirty years of rapid growth, the Chinese economy is now threatening to overtake the U.S. economy as the world’s largest, according to some measures. But there’s still plenty of scope for so-called “catch-up growth.” In terms of G.D.P. per person, the United States is still about five times as rich as China. Even middle-income countries such as Latvia and Chile are twice as rich. But with the formerly Communist nation still spending close to fifty per cent of its G.D.P. on infrastructure projects, education, and other forms of investment, the gap is likely to keep closing for some time. That’s what happened in other fast-growing Asian economies that industrialized earlier, such as Japan and Korea, and there’s no reason to expect China will be different.
10. Will the bitcoin bubble burst? Perhaps. In recent months, the online currency has gone from a cult object to an economic phenomenon that governments and investors are starting to take seriously. Even Ben Bernanke said that such currencies “may hold long-term promise.” But that doesn’t mean that bitcoins are worth their current price in the market. Underlying all the hype and discussion is a bit of a contradiction. If bitcoins are the next-generation means of payment for global online commerce, which is what some of the currency’s techie boosters believe, we are going to need a lot more of them in circulation. But once there are lots more of them going around, their scarcity value will diminish, and so will their price. …
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