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The Wealth Of Nations – An Approach Based On The International Valuation Standards

Author

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  • Bogdan-Radu Herzog

    (School of Advanced Studies of the Romanian Academy)

Abstract

The paper proposes a new approach to the valuation of the efficiency of a national economy by using the corrected net asset method (ANC) recommended by the international valuation standards. The author starts by noticing that the main statistical indicator currently used for assessing a country's economic status, namely gross domestic product (GDP), is an indicator of the value of the produced output, without really reflecting the patrimonial status of the subject. Unlike states, companies are required by law to present two basic documents: a balance sheet, with assets and liabilities, and a profit and loss account, which reflects the revenues and expenditures generated. Should a balance sheet-type document be presented by the state, reflecting both assets and liabilities, a corrected net asset value (ANC) could be calculated. The evolution of a national economy could be traced by following this indicator over a period of time (ANCn - ANCn-1). As a consequence, when assessing, for example, the evolution of the national economy, we will compare not only GDP2018 with GDP1989, but also the evolution of the net asset position of the Romanian state over the same period, i.e. ANC2018 with ANC1989.

Suggested Citation

  • Bogdan-Radu Herzog, 2019. "The Wealth Of Nations – An Approach Based On The International Valuation Standards," Perspectives of Law and Public Administration, Societatea de Stiinte Juridice si Administrative (Society of Juridical and Administrative Sciences), vol. 8(1), pages 29-35, May.
    • Handle: RePEc:sja:journl:v:8:y:2019:i:1:p:29-35
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    More about this item

    JEL classification:

    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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