Redefining the Economical Power of Nations: An International Macroeconomic Model that Introduces a Future Aspect into the GDP

27 Pages Posted: 28 Sep 2013 Last revised: 3 Aug 2014

Date Written: August 2, 2014

Abstract

The paper challenges the current common rankings of economies when measured over the GDP, and introduces a set of new Indices based on the factors GDP, Gini Coefficient and Inflation. This Social factors relativized GDP cuts out that part of the GDP, which is structurally long term frozen up by social transfers. Furthermore, the paper introduces an economic model that implements the future aspect into the GDP over the factors of change in capital expenditures and change in private investments. The first part of the pa-per explains the κ_Index models, the factors that were applied, as well as the reasons for the choice. The second part of the paper shows variations of the κ_Index including a few ideal-typical examples. The final part asks some critical questions and concludes the pa-per.

Basic social factors relativized GDP: κ _Index = GDP – GDP x Gini is (1 – GINI) x GDP Inflation indexed Version: κ _Index_Infl. = (1 – Gini – Inflation) x GDP Future aspect of GDP With Private Investment variable: κp = (B B × ΔP) – (B × G) With Private Investment variable and inflation: κip = (B B × ΔP) - [(B × G) (B × In)]

Productivity Index: κ_PROD = κ_Index / Labor Force = κ_PROD Inflation indexed Productivity Index: κ_PROD_Infl. = κ_Index_Infl. / Labor Force

Debt-to- κ _Index κ _Debt = National debt / κ_Index Debt-to- κ _Index_Inflation κ _Debt_Infl. = National debt / κ_Index_Infl.

Suggested Citation

Kiss, Christian, Redefining the Economical Power of Nations: An International Macroeconomic Model that Introduces a Future Aspect into the GDP (August 2, 2014). Available at SSRN: https://ssrn.com/abstract=2331683 or http://dx.doi.org/10.2139/ssrn.2331683

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