What is the wealth of an economy?

  1. CHRIS57 profile image60
    CHRIS57posted 5 years ago

    What is the wealth of an economy?

    There is a lot of talk about debt, about public debt in particular. There is little said about assets, about equity.
    Isn´t the real wealth of an economy the difference between all accumulated public, household and corporate assets and debt? Isn´t the yearly change in wealth the difference of how much is falling apart, how much assets depreciate and how much is spent to rebuild and eventually build new?

  2. nakmeister profile image82
    nakmeisterposted 5 years ago

    I broadly agree with your suggestion, just like for a household, the value of an economy is in its net assets. It would be interesting to see some statistics of the changing wealth of the economy based on your definition, particularly how the falling apart of assets and the lack of re-investment affects the wealth of an economy over time.

    I suppose one useful definition of the wealth of the economy is the Surplus or Deficit on the Balance of Payments. A surplus on the Balance of payments current account means that a country is broadly exporting more than it is importing, a deficit that is 'exceeding its income'.