A better indicator for standard of living: The Gross National Disposable Income
Clara Capelli, Gianni Vaggi 06 March 2014
The GNI is often regarded as the best indicator of a country’s living standards, but it does not record unilateral transfers – most importantly remittances – which are amongst the largest types of income inflows to developing countries. For many developing countries GNDI is significantly larger than GNI, from 3% for India to 75% for Liberia. This column argues that GNDI is preferable, since GNI masks heterogeneity in purchasing power.
Traditionally, the Gross Domestic Product is the most widely accepted indicator of an economy’s size and performance, although in the last decades many contributions have suggested to adopt alternative tools to measure people’s wellbeing (see Stiglitz, Sen, and Fitoussi 2008).
Remittances, GNDI, GNI, PPP
Remittances and vulnerability in developing countries: Results from a new dataset on remittances from Italy
Giulia Bettin, Andrea F Presbitero, Nikola Spatafora 10 February 2014
Remittances are one of the most important financial flows to developing countries – more than three times the level of official development assistance. This column presents recent research on remittance flows from Italy. Their limited volatility and countercyclical behaviour with respect to macroeconomic conditions in the recipient country help mitigate developing countries’ vulnerability to external shocks. Better access to financial services for migrants can foster remittance flows.
Remittances from migrant workers currently represent one of the most important financial flows to developing countries. They can play an important role in pulling millions of families out of poverty. It is therefore critical to identify the key factors affecting remittances, as well as the barriers to these flows (Beck and Martinez Peria 2009 ). In particular, it is important to understand how remittances depend on macroeconomic conditions in the migrants’ host country and country of origin, and how they were affected by the global financial crisis.
Italy, migration, global financial crisis, financial development, Remittances
What explains the cost of remittances?
Thorsten Beck, Maria Soledad Martinez Peria 28 September 2009
Remittances impact development along a number of dimensions including poverty alleviation, education, and entrepreneurship. However, such transactions are expensive. This column shows that a bigger stock of migrants and more competition are associated with lower transaction costs. It says policymakers should focus on improving competition in the remittance market, as regulations have only a limited effect.
In 2008, remittances to developing countries reached $328 billion dollars, more than twice the amount of official aid and over half of foreign direct investment flows (World Bank, 2009). Numerous studies have shown that remittances can have a positive and significant impact on economic development along a number of dimensions, including poverty alleviation, education, entrepreneurship, infant mortality, and financial development.
competition, banks, Remittances