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Estimating World Market Distortion
Estimating World Market Distortion
Overview
Overview
In order to situate the comparative quantisation of country experience, the statistical device of World Market Distortion (WMD) has been customised to illustrate equivocal structural bias as a functional delimiter in comparative global analytics. WMD thereby constitutes an interceding explanatory factor as to differential country capacity to respond to apparent disadvantages of vulnerable sectors of the demography.
Mathematical Formulation
Mathematical Formulation
World market distortion conceptualises the market instrumentality as a public expediency circumscribed by innate centripetal propensities that are inherent to the gravity and order of magnitude of the consumer base (market size).
The mathematical formula for WMD is as follows.
WMD = {[(w(x)][GNI per capita (x)]} - {[w(x)][Population(x)]}, simplified
WMD = [Weighted Income] - [Weighted Population]
where, country income weights may be measured in conventional terms of Hard Currency (US dollarisation) or Soft Currency (International dollarisation).
MSI computes WMD using global databases to yield a (a) United States dollar index (USDI), which translates to annually adjusted (normalised) measures of world income weights based on GNI per capita; and (b) International dollar index (PPPI), calculated by annually adjusted (normalised) world income weights based on purchasing power parity (PPP) per capita, commonly termed an 'international dollar'.
Data Analysis
Data Analysis
External engagements of the open economy produce disproportionate net sample outcomes by measures of both hard currency (US $) and soft currency (Intnl $).
How to cite this article
MSI (2019) Estimating World Market Distortion (WMD). Minority Sector Indices (MSI) Web Channel. RDX e-Publishing.
World Market Distortion Rankings
Hard Currency USDI Method
Soft Currency PPPI Method
WMD Database (2005-2018)
Main Database
World Population Databases
> United Nations Population Information Network
> Wikipedia Population Databases
World Income Databases
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Chart 1: WMD in terms of Hard Currency v Soft Currency
The global mean section represented by 6% (11 out of 183) of countries surveyed are identified as 'neutral' meaning that they exhibit world market non-distortion (WMnD, WMD=0.0000-0.0050). In proximity, a global median section equivalent to 34.97% (64 out of 183 countries) are almost world market non-distortion (WMnD, WMD=0.0050-0.0500%).
Outlier groups comprising the World Market Distortion (WMD) demographic include 20.22% (37 out of 183 countries) categorised as Above Par (WMD>0, WMD=0.0050-0.0250), another 60.11% (110 out of 183 countries) featuring as High WMD (WMD>0, WMD=0.0250-0.5000) and an upper rung of 10.38% (19 out of 183 countries) technically Ultra High WMD (WMD>0, WMD=0.5000-1.0000).
Through the 12 month interval, the upper echelon of global Ultra High WMD (WMD>0, WMD=0.5000-1.0000) increased by an estimated 73% as a result of the premier listing of an additional eight countries enlarging the top cluster. New leading WMD countries include Australia, Hong Kong, Germany, and Canada joining the Ultra High WMD ranks hitherto dominated by Northern European states of Scandinavia and the Benelux.
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Chart 2: World Market Non-Distortion (WMD Countries Almost Neutral)
Market-linked uncertainty of the global monetary cycle and largely moderated pro-cyclical indicators following the recent global economic downturn flow through to divergent outcomes and overall structural transformation of WMD indicators for all world regions. During the 2018 survey period, the majority of countries (ex the Americas (+12.27%)) underwent a net migration out of the WMD Almost Neutral (WMD=0.00-0.05) category: Africas (-0.72%), Asia (-5.50%), Europe (-6.39%), and Oceania (-8.89%).
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Chart 3: World Market Non-Distortion (WMD Regions Almost Neutral)
Over the mid to long run interval (2006-2017), World Market Non-Distortion (WMnD) exhibits marked variance with global economic indicators. Regional results were counter-acted by the prolonged global economic downturn (Global Financial Crisis (2007-2008) and Great Recession (2008-2012)) as most continental profiles nominally deviated from the WMnD cluster.
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Chart 4: World Market Non-Distortion (WMD Regions Neutral)
A total of 6 countries (3.28%) equivalent to a net world population weighting of 43.68% (-6.89% relative to 2016) are identified as critical WMD countries (sub-zero WMD). The regional characterisation of this sub-group is: 33% Africas (-11.44%), 17% East Asia (+5.89%) and 50% South Asia (+16.67%).
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Chart 5: Sub-Zero WMD Countries
Applications
Applications
MSI uses the WMD metric to evidence significant disturbances (or errors) in the centre of gravity of the international political economy (IPE) that result in inefficient markets - a form of centrifugal (or radial) dissonance - and unequal country outcomes that flow through to adverse country experiences.
Chart 6: MGPI & WMD (Hard Currency)
Global uneven development exposes a 'bottom-section' skew (+10.55%) in which 72 out of 186 (38.71%)(-12.85%) countries are mild-moderate form sub-zero WMD (WMD<0). The most outliers being China (WMD=-7.85, (+2.98%)) and India (WMD=-15.56 (+0.70%)) which are identified as densely sub-zero WMD by measures of hard currency. Notwithstanding, while MGPI leading countries tend to score marginally above par WMD values (WMD>0), the majority of countries surveyed were in relative proximity to world market non-distortion (nWMD) (WMD=0). Overall, this statistical result indicates greater uniformity of prospects for sub-sectional progress among the larger proportion of minority groups of the world.
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Chart 7: MGPI & WMD (Soft Currency)
International dollarisation induces horizontalisation of the MGPI survey set. Consistent with the global WMD determinants, most countries including China (WMD=-0.0546 (-2.59%)) and India (WMD=-0.1235 (-1.11%)) are characterised by nominally ameliorated sub-zero WMD. Hence, under the soft currency scenario, aggregate MGPI is structurally attenuated in order to adjust country dynamics and prospects for total country experience in the progress outlook for minority groups of the world.
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