Finance and Economics；Olympionomics;The dismal dash;Which economist will win themedal-prediction gold?Athletic prowess is not all that is being tested at this year's Olympic games.There will also be teams of econometricians battling it out to predict how many medals will be won by the host nation.Over the years economists have deployed all sorts of mental gymnasticsin their search for a model that can reliably forecast Olympic winners.Initial expectations that medal tallies would be closely correlated withthe population and per-capita wealth of a country were soon dashed.The models leapt over the hurdle of statistical significance onlywhen a third variable was added―how many medals the country won last time―but this did not add much by way of explanation.Apart from the persistence of good (or bad) performance from one Olympiadto the next,the dismal scientists hopped, skipped and jumped to two otherstatistically significant results.First, there was a“Soviet effect”, whereby the planned economies of the former communist bloc tended to outperform,presumably due to forcing talented youngsters to specialise and pumping them full of steroids.This effect began to fall with the Berlin Wall.Second, the host nation tends to win more medals than it does at any other time.Why it does so is unclear, as is the exact size of the “host effect”―which is why, for economists,
