The National Wealth of Selected Countries - A Descriptive Essay
AbstractWhat determines the wealth of nations? If anyone knew the answer to that question, no-one would have heard of Adam Smith as an economist, and for that matter all economists. Economics is really the study of wealth creation under scarcity. The reason economists and others have a hard time pinning down the causes of wealth is that wealth is costly to measure, and many factors and forces are potential determinants. This paper describes, in a simple way, wealth accounting by extending the data assembled by a recent World Bank study. The extension will benefit those seeking to run time-series, cross-section, and/or pooled data regressions to assess how wealth is determined. But even from this simple data mining exercise alone the results indicate significant increases in the wealth of the 92 countries in this sample. From the theoretical standpoint the World Bank’s expanded measure under-estimates the wealth of developing countries. Yet, even if the income (GDP) component of their wealth has fallen, total national wealth has increased. The policy implications of this essay are tentative until empirical analysis is carried; even so, the results seem to suggest that GDP is a necessary but not a sufficient requirement for wealth.
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Bibliographic InfoPaper provided by EconWPA in its series Development and Comp Systems with number 0508007.
Length: 20 pages
Date of creation: 19 Aug 2005
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national wealth; Alfred Marshall on wealth; estimating wealth; World Bank’s national wealth estimating;
Find related papers by JEL classification:
- H00 - Public Economics - - General - - - General
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O49 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other
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