IN THE 1930s the Japanese economist Kaname Akamatsu proposed a theory of how the economies of Asia might take wing. It became known as the “flying geese” model of development. As Akamatsu pointed out, “Wild geese fly in orderly ranks forming an inverse V, just as aeroplanes fly in formation.” Japan, the first Asian country to industrialise, would lead the way. Its neighbours would follow, breaking into new industries as the goose in front graduated out of them.

Yet this year Japan was overtaken by a goose in its slipstream—not China, which remains far poorer than Japan, even if its economy is now bigger, but rather the island economy of Taiwan. In 2010, according to the IMF, Japan's income per head will be $33,800; Taiwan's will be over $34,700.

These incomes are converted not at market exchange rates, but at purchasing-power parities (PPPs), taking account of the higher cost of living in Japan. By this measure, Taiwan is not the first of the trailing geese to overtake the leader. Singapore and Hong Kong caught Japan in the early 1990s. South Korea is also closing the gap. Akamatsu's inverse V is beginning to turn into an X.

Calculated at market rates, Japan's per head income ($42,300) remains far higher than Taiwan's ($18,300). Tokyo's chic districts are richer than their Taipei counterparts. And if Akamatsu's theory applies to a country's industrial mix, rather than its standard of living, Japan is well out in front. It is further along in the transition to a service economy, with industry accounting for less than a quarter of its GDP, compared with almost a third for Taiwan.

Yet despite 15 years of deflation, punishingly high prices still take a toll in Japan on people's standard of living. PPPs are based on a global survey of prices led by the World Bank in 2005. It found that Taiwan's housing was a third cheaper than Japan's, even though Taiwan has almost double the population density. Taiwan's food also costs only half as much as Japan's. The survey's price-checkers did their best to compare like with like, matching the price of staples and delicacies in each country. Inevitably the comparisons can be contested. Taiwanese food may seem cheap next to Japan's sashimi and fugu. But then again, how much would you pay for stinky tofu?