This article presents the construction and analysis of a long-run GDP growth model, including sample results, its sensitivity to parameter choices, and explanations of the concepts underpinning it. It is designed to be flexible so that scholars can use it with their own assumptions and parameter choices to customize results. The model estimates GDP as a function of labor force, capital stock, and total factor productivity (TFP) for 185 countries through 2050 under alternate scenarios. It provides rough estimates for real exchange rates, poverty indices, median and percentile incomes and consumption levels, and the populations of the lower, middle, and upper income classes. The model also provides additional evidence for the TFP convergence phenomenon and the effect of the state failure on TFP growth. It can further be used to model stocks, accessibility, and investment requirements for 10 infrastructure sectors. The model can yield counterfactual estimates and actual and roughly estimated comparable historical data for most of the projected series, provided in identical units. For 126 countries, such series (e.g., TFP) are provided back through 1956, and for some even earlier.

At the Emerging Markets Forum in October 2010, initial results were presented from an exercise that attempted to measure the resilience of emerging market and developing countries (EMDCs) to deal with shocks to their economies. This paper updates, improves upon, and draws conclusions from that index. A key conclusion is that the Resilience Index appears to have the power both to identify economies that are heading to trouble and to identify the specific policy areas of weakness that lie behind their increasing vulnerablility. The Resilience Index can add to the tools of the economic surveillance process-at least as a device to help insure that weaknesses are surfaced, and that deeper analysis is conducted to assess those weaknesses and suggest corrective policies. It is clear from this analysis that building resilience-and making it a priority of policymakers-can pay high dividends. In particular, we show that the Resilience Index clearly demonstrates that emerging weaknesses in many economies were evident well before the global crisis and the crisis in Europe.

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Financial wealth over the last decades has become the clearest sign of economic advancement and well-being. The collapse of fi nancial markets in the last 2 years has been a cataclysmic event. The loss of fi nancial wealth has been enormous, and the consequences for the economies of the world are commensurate. The loss of capital value of fi nancial assets worldwide may have reached US$50 trillion in 2008, the equivalent of 1 year of world gross domestic product or about one-quarter of total fi nancial wealth before the crisis. While there has been some recovery so far in 2009, conditions under which fi nancial markets have been operated for a few decades are unlikely to be replicated soon. The generation of wealth witnessed in recent years may come back, but in a much more sedate and controlled fi nancial system, and subject to stricter rules. The impact of the current crisis has affected all regions of the world, showing that the decoupling theory that had been prevalent during earlier years was misplaced. There were particularly large declines in the case of Developing Asia and the European Union. This is explained by the impact of the decline in stock market values by almost one-half, and the reduction in the values of fi nancial assets and higher spreads on debts. The decline had a direct effect on the performance of economies worldwide, with the decline in activity observed in 2009 of about 3 percent a year consistent with the loss of wealth described here. The implications of the loss of wealth, even if partially reversed, for the future are complex. It has been absolutely essential for governments to continue supporting demand, in the face of the existing collapse of private demand. However, the injection of liquidity and the rapid increase in government debt has a limit, to avoid a negative reaction by the public. Otherwise, the loss of wealth already experienced may be combined with increased infl ation and a loss of confi dence in public debt instruments that would aggravate rather than correct the existing level of economic distress.

This article is an updated version of the article “Financial Wealth: Sustained but High Gains and a Collapse for the Ages: An Estimate of Cycles of Buildup and Destruction of Wealth 2002–2009” from the January 2010 issue of the Global Journal of Emerging Market Economies (Loser & Arnold 2010). In the previous article, we estimated the swings in financial wealth through 2009, breaking down our estimates by region and asset class. In this updated piece, we extend those estimates through 2011. We also estimate what portion of the recovery in financial wealth beginning in 2009 has been due to a strengthening market, and what portion has been due to government intervention.