GOLDMAN SACHS (Messrs Experts On Everything) says that a successful bid by Beijing to host the 2008 Olympic Games will boost China's economic growth and bring long-lasting efficiency gains.
Really? Time for a little number crunching in that case. If it is true for China, then it has to be true in general for countries which have hosted the Olympics. The Chinese economy cannot be quite that special. What has the historical record been?
Here is the test. Take the countries that have hosted Olympic Games since 1956 (reliable data is hard to find for earlier years) and calculate their quarterly economic growth rates for a period from three years prior to the games to four years after.
Next line up the figures for each country on this time scale and calculate the simple average of their growth rates on this basis. We shall use year-on-year growth rates here and take four quarter moving averages of them.
The chart shows you the results of this exercise. Yes, countries that hosted the Olympics did indeed show an economic growth spike in the year of the games, mostly towards year's end.
However, it was on balance followed within a year by a notable economic slowdown and growth in the years immediately after the games was clearly less than in the years immediately preceding them.
Granted this is a rough exercise but refining it would probably show the post-games growth rates to be even lower. For instance, the 1980 games are not included in this sample as the Soviet Union no longer exists and old Soviet economic statistics have vanished along with it.
