Why Gross National Disposable Income should substitute Gross National Income

Clara Capelli () and Gianni Vaggi
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Clara Capelli: Department of Economics and Management, University of Pavia

No 91, DEM Working Papers Series from University of Pavia, Department of Economics and Management

Abstract: The Gross National Income (GNI) is often used as an indicator for a country’s living standards. Yet, it does not record unilateral transfers and notably remittances, which in the last decades have gained growing importance as a source of income for developing countries. Gross National Disposable Income (GNDI), includes both income and transfers and provides a much better account of people’s actually available income. However GNDI is sometimes confused with the GNI and is rarely available in major reports. This paper fills this gap by calculating the GNDI for all the countries in the World Bank database and it discusses the use of GNDI for 27 countries amongst the world top remittance receivers. We show that GNDI is much more informative than GNI and is a much more reliable basis for policy making in developing countries.

Keywords: Gross National Income; Gross National Disposable Income; Living standard; Balance of Payments; Current Account; Remittances (search for similar items in EconPapers)
JEL-codes: F60 O11 O15 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2014-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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