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Why Gross National Disposable Income Should Replace Gross National Income

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  • Clara Capelli
  • Gianni Vaggi

Abstract

Unilateral transfers, and notably remittances, are a growing source of income for developing countries. However, Gross National Income (GNI), which is widely used as an indicator for living standards, does not record them. Gross National Disposable Income (GNDI), by contrast, includes both income and unilateral transfers, thus providing a more exhaustive account of people's available income in an open economy. Yet, GNDI is rarely available in major reports and is sometimes confused with the GNI. This article calculates the GNDI for 27 countries amongst the world's top remittance receivers and demonstrates the usefulness of this measure for analysis and policy making in developing countries. The article also provides some critical insights into the role of income and unilateral transfers in the balance of payments.

Suggested Citation

  • Clara Capelli & Gianni Vaggi, 2016. "Why Gross National Disposable Income Should Replace Gross National Income," Development and Change, International Institute of Social Studies, vol. 47(2), pages 223-239, March.
    • Handle: RePEc:bla:devchg:v:47:y:2016:i:2:p:223-239
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    File URL: http://hdl.handle.net/10.1111/dech.12225
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    2. Gianni Vaggi, 2018. "Development Finance in the age of Financial Mercantilism," DEM Working Papers Series 157, University of Pavia, Department of Economics and Management.

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