Open economy measures of wealth and Hicksian national income

This paper argues that a total approach to macroeconomic stock estimation is necessary when assessing the overall significance of a nation's foreign debt level. In an increasingly integrated global economy, changes in national wealth—the difference between the value of internationally tradable assets and external liabilities—not only help gauge creditworthiness, but may be used to complement the traditional flow measures of gross national product and national income. Moreover, following Hicks (1946), changes in open economy measures of wealth yield a new measure of national income. Prototypical estimates of wealth and Hicksian income are presented for Australia by way of example. Copyright Kluwer Academic Publishers 1994