iGDP?

The Journal of Portfolio Management 41(3) (2015) 4-6, Invited Editorial

Posted: 26 Dec 2014 Last revised: 4 Jun 2015

See all articles by Zura Kakushadze

Zura Kakushadze

Quantigic Solutions LLC; Free University of Tbilisi

Jim Kyung-Soo Liew

Johns Hopkins University - Carey Business School

Date Written: December 24, 2014

Abstract

We define iGDP, the gross domestic product (GDP) aggregated via a valuation of all finished goods and services produced within a country using a universal numeraire we refer to as iCurrency. We propose 4 criteria for iCurrency: 1) it is not a currency issued (or backed) by any government; 2) it is valued based solely on supply and demand; 3) it is easily transferred across regions and globally accepted as a payment method; and 4) it is algorithmic, with no human intervention. Using the iCurrency concept as a universal numeraire makes iGDP less prone to: 1) erratic FX rate fluctuations; 2) possible government manipulation; and 3) comparative advantage intervention policies. We further ponder the benefits of employing iCurrency as a universal world currency, which could enable more precise estimations of global inflation, global output, global productivity, global labor gains, and other global macroeconomic indicators, and improve overall measurements of our global economy. The article can be freely downloaded from The Journal of Portfolio Management's website.

Keywords: GDP, universal numeraire, FX rates, purchasing power parity, cryptocurrency, supply and demand, universal world currency

JEL Classification: G00

Suggested Citation

Kakushadze, Zura and Liew, Jim Kyung-Soo, iGDP? (December 24, 2014). The Journal of Portfolio Management 41(3) (2015) 4-6, Invited Editorial. Available at SSRN: https://ssrn.com/abstract=2542541

Zura Kakushadze (Contact Author)

Quantigic Solutions LLC ( email )

1127 High Ridge Road #135
Stamford, CT 06905
United States
6462210440 (Phone)
6467923264 (Fax)

HOME PAGE: http://www.linkedin.com/in/zurakakushadze

Free University of Tbilisi ( email )

Business School and School of Physics
240, David Agmashenebeli Alley
Tbilisi, 0159
Georgia

Jim Kyung-Soo Liew

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

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