The Evolving Dynamics of Global Economic Power in the Post-crisis World: Revelations from a New Index of Government Economic Power

This paper develops an index for measuring the economic power of governments viewed as entities in themselves. The basic idea is to encapsulate the economic representative power of a nation’s government in the international arena in as simple and parsimonious a manner as possible. For this a set of standard data series drawn from internationally accepted data sources is used. The index is composed of four variables: government revenues, foreign currency reserves, export of goods and services, and human capital. These variables broadly reflect aspects that contribute to a government’s economic clout, voice and negotiating leverage by capturing elements like its ability to raise resources, its creditworthiness and credibility in international financial markets, its influence on global economic activity and its potential in terms of human resources. The index values are tracked over 10 years (2000-2009) covering 100 economies. [4/2011]. URL:[http://finmin.nic.in/WorkingPaper/Index%20of%20Government%20Economic%20Power.pdf].