10 Sep 09
Originally posted by EmLaskerAh, there's the rub: the numbers (though not nearly as cool):
Mr. OP, how do we measure this economic "competitiveness"?
The Global Competitiveness Index (GCI) is made up of over 113 variables, of which approximately one two thirds come from the Executive Opinion Survey, and one third comes from publicly available sources. The variables are organized into 12 pillars, with each pillar representing an area considered as an important determinant of competitiveness:
Institutions
Infrastructure
Macroeconomic stability
Health and primary education
Higher education and training
Goods market efficiency
Labor market efficiency
Financial market sophistication
Technological readiness
Market size
Business sophistication
Innovation
The impact of each pillar on competitiveness varies across countries, in function of their stages of economic development. In order to take this reality into account in the calculation of the GCI, pillars are given different weights. The structure of the index is available in the appendix of Chapter 1.1 of The Global Competitiveness Report 2007-2008 under www.weforum.org/gcr.
10 Sep 09
1 edit
Originally posted by rwingettAh, ok. Try this if it still doesn't work.
It doesn't seem to work on my browser. Guess I'll have to download the pdf.
http://www.yousendit.com/download/YkxMa3NlcTJKV05FQlE9PQ
(Edit - I think gov't or current account deficits are leading to these strange rankings. That they call it Macro stability seems to be a misnomer. Anyway, these type of rankings aren't very useful.)
11 Sep 09
Originally posted by eljefejesusI have to look at it more carefully, but on a first glance I suspect they count govt or current account deficits as instability, regardless of the real possibility of default. Obviously a deficit of x% is has a different impact on economic instability if it happens in France or Argentina and they should weigh that accordingly or at least reduce the importance of that statistic.
Which macraeconomic indicators do you find to be so misrepresented as to not be countered by other aspects of macroeconomic stability. Inflation for example?
11 Sep 09
If they are cutting so much of the instability analysis as to outweigh gains in model simplicity with losses in accuracy, I agree that in such a case it would call for additional improvements. However it doesn't seem that there's any detailed criticism yet as to which mistake they were caught making. Certainly credit risk should be considered in a practical but hopefully reasonably accurate way.