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World Economics Blogs

How Accurate Are Population Data? How Accurate Are Population Data?
Accurate population data on the total number of individuals living in a country, the demographic breakdown by age and gender and their geographical distribution is extremely important. International differences in the relative standard of living across countries are assessed by development institutions such as the World Bank by calculating GDP per capita. At the national level in most countries, population counts are used to apportion funds between local governments, to allocate voting districts for national parliaments and to determine policy needs. Accurate urban population and rural estimates are vital for planning purposes particularly to forecast the pressures on transport, water and sewage, energy infrastructure and housing needs. ...
Forging New Value Chains For African Goods Forging New Value Chains For African Goods
Although trade statistics are unable to reveal what originates where, and what is sold at which price, with sometimes unintended and dramatic effects on trade relations, significant commodity value chains originating in Africa have been circumnavigating the world for decades. But Africa benefits the least as their commodities and natural resources are invariably just hoisted out of the earth and immediately exported for onward processing and value enhancement....
Employment, Under-employment and Unemployment in Africa Employment, Under-employment and Unemployment in Africa
Africa’s fast-growing markets should be producing far more commercial opportunities for its businesses and yielding far more jobs for its people, but they are not. If there is genuine economic growth occurring in Africa’s major cities then current data and the view from the street are not reflecting it. Jobless growth haunts the cities of Africa....
The Strange Story of Cote d’Ivoire’s Disappearing Coins The Strange Story of Cote d’Ivoire’s Disappearing Coins
Cote d’Ivoire is by some accounts one of Africa’s best performing economies, with a reported GDP of 7.4% in 2018. It seems to do well in foreign direct investment, with total FDI stock of $10.2 billion, representing 23.8% of the country's GDP. Above all, President Ouattara claims to have resolved the problems associated with the bloody years of civil conflict, particularly between 2004 and 2011, despite a jittery local population who will head quickly behind closed doors at the sound of gunfire in the streets, and have had to do so twice since 2017. But the government does have one very obvious and curious monetary problem. For some r...
Poverty, Trade Policy and Migration Poverty, Trade Policy and Migration
Poverty in Africa is passed inevitably down through the generations, even more assuredly than is private wealth. Most Africans are hopelessly poor, conditioned by location, time, politics, geography and birth. Yet global media distribution allows them to know that a fulsome standard of living is technically available less than a few hours away by plane....
Italy: How to Decimate a Country in Less Than 20 Years Italy: How to Decimate a Country in Less Than 20 Years
In 1960, Italy’s GDP was 15% smaller than France’s, and 27% lower than the average of Germany, the Netherlands, Belgium and France’s combined. However, this country enjoyed steady growth until the start of the 1990s as Italian household income caught up with the period’s norm for the other eurozone nations, so much so that around 1995 France and Italy’s GDPs converged and there came to be only a 6% difference between the average of the countries mentioned above. Since then, the Italians have seen a notorious impoverishment with the gap between their incomes and those of the French reaching nearly 20%, worse than during the 1960s....
Gender Matters in Poverty Gender Matters in Poverty
Most Africans suffer poverty and inequality in various different forms, including income and employment, geography, age and gender. The gender dimension is particularly significant, with poverty rates among women and girls far higher than among men or boys....
Lords of Poverty Lords of Poverty
What do you think happens to the used clothes we give to clothes banks? Some go to charities for the poor, some to emergency aid, but most go to maintain a multi-million dollar international business, with companies exporting mostly American and European second-hand clothes to Africa at market rates, creating big turnovers and profits for all the various middlemen. ...
What GDP Methodology Has To Do With Economic Convergence What GDP Methodology Has To Do With Economic Convergence: What GDP Methodology Has To Do With the Debate about Economic Convergence
Have developing countries converged on advanced countries? This was a topic of much discussion in the 1980s and 1990s, and it recently resurfaced (see e.g. here or here). As the debate rages on, one element has gone unquestioned: the use of Gross Domestic Product (GDP) as a measure of growth. Our new GPID Working Paper closes this gap. In the paper, we show how the assumption that GDP calculation is done in line with economic theory is incorrect – and that the changes made to GDP measurement over the past two decades have a bias towards countries traditionally in ‘the West’. As this has had a substantial impact on the assessment...
The Looting Machine Accelerates, or a Better Life for Africans? The Looting Machine Accelerates, or a Better Life for Africans?
There are two very different views on current prospects for Africa. First there is widespread agreement that companies and countries (particularly China and Russia) have become very interested in Africa of late....
Reflections on the reality of life in Cote d Ivoire Reflections on the reality of life in Cote d Ivoire
In late 2016 the McKinsey Global Institute published a report called "Lions on the Move II: Realizing the potential of Africa's economies". The report included in the analysis the "official" growth rates for many African economies, and concluded that "Africa's economic fundamentals remain strong..." The recently updated World Economics Data Quality Ratings suggest that much of the GDP growth evidence on which the McKinsey report is partly based (and many other recent papers on the new "Scramble for Africa") is potentially misleading.  The McKinsey paper suggests (to take one example) that the Cote d'Ivoire economy has been growing at a very healthy 6%+. But The Data Quality Rankings show that the quality of official data from Cote d'Ivoire is significantly flawed , with data currently built on a base year of 2009 , and an SNA of 1993...
Serious Errors on UK Telecoms Data: Prices could have fallen by 90 Percent more than the official price index Serious Errors on UK Telecoms Data: Prices could have fallen by 90 Percent more than the official price index
The Office of National Statistics (ONS), Britain’s official data agency, has admitted that it has made serious errors in its estimation of the output and productivity of the telecoms sector. A paper co-authored by Richard Heys, deputy chief economist of the ONS which compared approaches to deflating the output of the telecoms industry across countries found a “wider disconnect between the technological performance and economic measurement of the industry in the UK.”1 The authors reported that the deflator used in the UK telecoms sector was biased upwards. The ONS mismeasurement problem aros...
Can Big Data Improve Economic Measurement? Can Big Data Improve Economic Measurement?
Half a decade ago one estimate put the daily global creation of data at around 2.5 exabytes [2.5×1018 bytes] and it was predicted last year that this would rise to 163 zettabytes of data by 2025 [1.63 x 1022]. To meet this demand global per-capita information storage capacity has doubled every 40 months since the 1980s.1 Unfortunately, in the face of this revolution the tortoise-like evolution of the methods used to generate official economic statistics means that measurements of real economic activity are becoming increasingly irrelevant.  The underlying methodology to measur...
Trade Data: Use with Care Trade Data: Use with Care
Not only do world exports and imports not balance, but large asymmetries are found in the balance of trade statistics between countries and regions. These errors do not cancel out on aggregation across countries. Asy...
Debt to GDP Ratio Debt to GDP Ratio
One of the most widely used and misused statistics is the ratio of public debt to national income as a measure of a country’s solvency. The debt-to-GDP ratio itself is measured with a country's gross sovereign debt in the numerator and Gross Domestic Product (GDP) in the denominator. A debt-to-GDP ratio of 1.0 (or 100%) means that a country's debt is equal to its gross domestic product. It is used extensively by credit rating agencies, but making sense of any particular ratio is difficult. Controversy over the use of the...
The UK Retail Price Index The UK Retail Price Index
Calculating price indexes that are theoretically sound, robust, comprehensive, easy to understand, and which reflect underlying reality is one of the hardest tasks in economics. Most measures of domestic inflation have flaws, but perhaps the least fit for purpose is the Retail Price Index (RPI) used in Britain. In official use since 1956 the RPI is calculated in a different way from the alternative Consumer Price Index (CPI) in use since 1996. RPI estimates of underlying inflation are generally at variance from CPI calculations, with the RPI recording annual prices increase at a rate around 0.9 percent higher than the CPI. Estimates for price changes also vary widely by goods category, especially for clothing....