World Economics - Insight , Analysis and Data

World Economics - Measuring the World Economy

About World Economics

World Economics - background
World Economics is an organisation dedicated to producing analysis, insight and data relating to questions of importance in understanding the world economy.

Currently our primary research objective is to encourage and assist the development of better and faster measures of economic activity. In cases where we believe we can contribute directly, as opposed to through highlighting the work of others, we are producing our own measures of economic activity.

Our work is mainly of interest to investors, organisations and individuals in the financial sector and to significant corporations with global operations, as well as governments and academic economists

Our first product, World Economics Journal, has over the past decade, carried the writings of many of the world's leading economists and its credentials are further demonstrated by the high caliber line up of its Editorial Board.

Unlike the majority of economic journals, our distinguishing characteristic has been an insistence on authors writing in an easily comprehensible style, without jargon or  mathematics, allowing a very wide readership to benefit from the thoughts of our eminent authors. We make available to policy makers the results of advanced economic research without the need for translation from the mathematical forms of output so beloved of the modern day academic economist.

A website has been used for many years to augment the distribution of the Journal, and to carry papers to supplement the limited capacity of the printed version. But we are now launching a much more ambitious version of the website, which will not only speed up the dissemination of the ideas of our contributors, but also act as a home for our own datasets, designed to help policy makers, investors and businesses generally  make more sense of the economic environment.

Datasets already available include the:

Sales Managers' Indexes
The Sales Managers' Indexes provide the earliest monthly data on the speed and direction of economic activity in the fastest growing areas of the world: Africa, Asia and the America's.

Key advantages of the SMI's :
    • The SMI's provide the first indication each month of the speed and direction of economic growth.
    • The SMI's provide the most complete indication of growth, covering all private sector activity.
    • The SMI's are based on a key occupational group - sales executives - uniquely able to sense accurate changes in business activity levels.
    • The SMI survey base - salespeople - are used by virtually all businesses, including in frontier markets, unlike other occupational groups.
    • The SMI's focus on the worlds growth areas - Africa, Asia and the America's

Why the SMI's are needed
Businesses need growth. Unfortunately much of the worlds growth today derives from countries where economic data is either entirely missing, hopelessly incomplete or just fabricated. The Economist (15.5.14) highlighted the problem in relation to Africa, "Africa is the continent of missing data. Fewer than half of births are recorded; some countries have not taken a census in decades".

World Economics has recently highlighted (in Africa, Asia, and The America's) the huge under-recording of most countries GNP data due to out of date base years and the unrecorded shadow economy.

The SMI's bypass all the data faults of official statistics by obtaining representative samples of replies from panels of salespeople specifically set up to monitor levels of activity. Traders, economists and Government no longer need to guess if Nigerian growth is faltering, or if the Philippines is taking off as a growth market. As a consequence, over 40,000 economists, traders, bank officials, government advisors and others use World Economics data each month.

World Price Index
The World Price Index is calculated monthly from a basket of internationally comparable goods and services. It is designed to alleviate the horrendous problems associated with analysing economic or market data using currency market exchange rates.

To illustrate the problem:
"Imagine that over the last 4 years the US economy has shrunk by 30% and the Chinese economy grown at 2% not 10%. Imagine house prices in the UK have dropped 60% ...This frozen wasteland is not some alternative universe , but what reality already looks like when the Japanese Yen"
(quoted from an FT article by Peter Tasker in 2011)

Exchange rates vary with extraordinary rapidity, frequently with little obvious link to economic reality, but fatally distorting the perception of value in markets and economies. It is vital when analysing international data, whether for market analysis purposes, or to allocate resources across the globe, to review data using an international yardstick of value. This can only be done using Puchasing Power Parities (PPP), which make allowance for the purchasing power of currencies within individual countries to make comparisons based on a standard currency, usually "international dollars".

There are various sources of PPP data, but most are of only academic interest as they are years out of date. The World Price Index is the only available index updated monthly to provide an easy way of reviewing trends or relative values of market or economic data in realistic terms.

Global Marketing Index
The Global Marketing Index ( GMI ) is designed to track changes in the speed and direction of advertising and marketing investment.

Advertising and marketing investment includes spend on mature media such as TV, print , radio, and out of home. Plus spend on digital advertising in social media , mobile and other newly minted forms of communication , now growing at breakneck speed and threatening to overtake traditional media in the future. The GMI tracks changes in budget allocation between these types of advertising and marketing, and activity levels in major geographic areas.

The GMI is a valuable complement to the Sales Managers Index as an economic indicator, as the GMI acts as a proxy indicator for the all important Consumers Expenditure slice of GDP. Advertising and marketing spend is concentrated in areas of high expenditure by consumers (automobile, food and drink, household goods, personal care products, etc) and hence is directly linked to the state of consumer markets which account for 50% or more of GDP in advanced economies. 

Further datasets due for launch in Spring 2015 include:
  • Global Purchasing Power Parity based Gross Domestic Product 1870-2014; 
  • Global Population dataset 
  • Global Wealth dataset

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