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Estimating Loss-in-Output as a Cost of a Financial Crisis
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Vighneswara Swamy, World Economics, June 2019
The global financial crisis caused a huge loss of economic output, depletion of financial wealth, extended unemployment, psychological consequences and other significant costs. A quantitative exploration of modelling loss-in-output as a cost of financial crisis using macroeconomic indicators is useful in understanding the impact of a crisis. The conservative estimates for India suggest that, over a period of ten years, a financial crisis can cause a cumulative loss-in-output ranging from 48% of GDP to 59% of GDP after discounting at 0.025 and 0.07 respectively. Intermediate values are also explored. Estimating loss-in-output in terms of GDP simplifies estimation of the impact of financial crises. Policymakers and regulators must be more prudent and alert in sensing the early indicators of a financial crisis and act swiftly in containing its perils.
Income Inequality and Foreign Direct Investment in Australia
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Anna Ploszaj, Tarlok Singh & Jen-Je Su, World Economics, June 2019
Income, wealth and consumption are three main factors that determine people’s standard of living. Many organisations in Australia report that in recent years the Australian standard of living has been changing, with some people falling behind. This paper examines the magnitude of and the factors contributing towards the growing income inequality in Australia. The data shows that income inequality, which in Australia in the mid-1990s was around the same level as in other developed countries, has recently outpaced their levels. The data on FDI shows that, at the same time as income inequality was on the rise, the amount of FDI inflows to Australia increased and despite a higher FDI restrictiveness index than the average for OECD countries Australia holds its position in the top ten countries in terms of the preferred destination of FDI.
The World Economy
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Ed Jones, World Economics, March 2018
The World Economy has grown for 57 out of the past 58 years, only the great recession of 2009 saw an interruption in over half a century of continuous growth. Over the whole of the last 5 decades, annual real GDP growth has averaged 3.2%, and 1.6% in per capita terms. Global Real GDP split by continent illustrates that the share of the world’s GDP in the Asian region grew considerably faster than all other continents, from 16.8% in 1960 to 47.0% in 2017. The wealth of Europe and the Americas remains considerably higher compared with Asian and African continents.
How Accurate Are the National Balance Sheets for China?
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James L. Chan, World Economics, September 2017
The accuracy of data on China’s national balance sheets has attracted much less attention than that of the Gross Domestic Product reports. China’s Bureau of National Statistics has not released official national balance sheets, but two Chinese research teams have produced estimates for recent years. A detailed analysis of these reports by the author reveals varying degrees of discrepancies for the whole Chinese economy and its components, and for different types of assets and liabilities. The System of National Accounts was claimed by researchers as a common framework, but non-standard classifications and disclosures of assets and liabilities from diverse data sources mean that many issues must be resolved before China’s wealth can be measured accurately.
Data on Singapore’s Sovereign Wealth Fund is Flawed
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Christopher Balding, World Economics, September 2015
This paper undertakes a critique of the quality of Singapore’s public economic data in the context of the claim that one of the island’s sovereign wealth funds, Temasek Holdings, reports that it has earned since inception in 1974 an average annualized rate of return of 16%. Over a similar time period the Singapore stock market earned 4.99% implying that Temasek on average outperformed the local stock market in which it was heavily invested, by a factor of more than three times every year. The paper replicates Temasek’s portfolio and analyses Singapore’s public finances and finds that irregularities may exist within Temasek financials. It concludes that if there are as of yet unknown financial weaknesses within Singaporean public finances that have yet to be realized then given the importance of the island in Asia’s financial markets, this should raise concerns over the quality of financial statements produced by government linked corporations and the public sector.
What is Britain worth to the next generation?
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Angus Hanton, World Economics, June 2015
Government economic policy implicitly aims to build up useful reserves for future generations, or at least to not burden our children and grandchildren with unsustainable debt. Surprisingly, even though this must be an important policy objective, it is rarely discussed or measured. This paper estimates what Britain is now worth to the next generation and we explain how well recent British governments have done in building up value to hand on. The results are eye-watering for anyone who has assumed that there has been a steady build-up of wealth.
Measuring Natural Capital
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Dariana Tani, World Economics, December 2014
The purpose of this paper is to highlight the importance of establishing a system of natural capital accounting. Natural capital is integral to the economy and yet it is routinely taken for granted because the goods and services it provides are generally freely available. The consequence is that without prices, these resources are not being allocated efficiently within the economy and opportunities for significant gains in well-being and the possibility of long-term future growth are being lost. Recent works by the World Bank and the Inclusive Wealth Report have provided a wealth accounting framework, which gives more emphasis to environmental assets; however, due to data and methodological limitations, they inevitably failed to capture all assets of natural capital as defined by the Natural Capital Committee’s (NCC) State of Natural Capital Report.
Asset Poverty in India
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Swati Dutta, World Economics, September 2013
In order to formulate policy to target the correctly identified rural poor in India, focus on an income poverty measure alone is insufficient. The purpose of this research is to study a new area of poverty measurement based on data that detail a household’s access to basic assets. The study has used the secondary data source provided by the Demographic and Health Survey (DHS) for the time period of 1992, 1998 and 2005. In order to construct the asset index the technique of multiple correspondence analysis is used. A discussion of trends in asset poverty in various states in India follows, together with the policies they need to adopt depending on their state of poverty.
Wealth and Population Data in Africa
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Brian Sturgess, World Economics, June 2012
There are very good grounds for challenging much of the conventionally accepted UN and World Bank economic data relating to both the absolute and relative per capita income of many African countries and to their growth rates over time. A recent paper by Morton Jerven published in World Economics demonstrated the unreliability of much if not most African GDP data and a new paper published in this issue by Deborah Potts challenges the accuracy of African population estimates"
Re-thinking Economic Progress
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Giles Atkinson, World Economics, March 2000
Most national governments have pledged a commitment to sustainable development. The transformation of these pledges into policy is a formidable challenge. Of particular interest are proposals for the construction of green alternatives to Gross Domestic Product (GDP), which it is hoped will provide policy-makers with a consistent and summary signal of "true" trends in the economy both now and into the future. This paper reviews the green accounting debate over the past decade. the author argues that, while initial expectations have, at times, been overstated, there are encouraging signs for policy-makers attempting to make sense of their commitments to sustainable development. One such indication is the increasing emphasis on improved measures of saving, providing a better link between actions in the present and their implications for the future.


The Black Economy - Benefit frauds or tax evaders?
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Jim Thomas, World Economics, March 2000
One answer to the question "How Rich are We?" is to compare levels of National Income either across countries or for a single country over time. However, the relevance of this approach depends on how accurately National Income measures the output of goods and services of a country. While it is difficult to measure, the Black Economy represents the output of goods and services that is not generally captured in the National Income Accounts. This article discusses the problems of measuring the size of the Black Economy and speculates on the questions of who is involved and how. The relative importance of Tax Evasion versus Benefit Fraud is discussed.



Displaying: 1-11 of 11