1. Quah (1996): Emerging Twin Peaks

2. Forecasting the future of the WDI (by country) Quah’s Methology: Based on historical experience  pp=probability of poor in 1960 staying poor in 2000  pr=probability of poor becoming rich  rp=probability of rich becoming poor  rr=probability of rich staying rich

3. Forecasting the future of the WDI (by country) N poor (2040)=N poor (2000)*  pp+ N rich (2000)*  rp N rich (2040)=N poor (2000)*  pr+ N rich (2000)*  rr Repeat the procedure infinite many times to get the ergodic (steady-state) distribution Conclusion: depends on Venezuela and Trinidad- Tobago