5 ms·
Norway’s Sovereign Wealth Fund Is the Size of the Mexico's Entire Economy
- Basketb926 8y agoNorway's Sovereign Wealth Fund has as much capital stock as the total flow of Mexico's Entire Economy. Obviously Mexico has a heck of a lot more capital stock which is required to create such a large economic flow.
- ceejayoz 8y agoI find this stat far more fascinating: > $190,000 for every one of Norway’s 5.2 million citizens
- HillaryBriss 8y agoyes. very interesting. it turns out that Norway is very unusual, on a per capita basis, among governments that have such funds: https://en.wikipedia.org/wiki/Sovereign_wealth_fund#Largest_sovereign_wealth_funds https://en.wikipedia.org/wiki/Sovereign_wealth_fund#Largest_...
- dopamean 8y agoThese types comparisons are made all the time make no sense. ITT Edit... lots of people complaining about the comparison (like me).
- sct202 8y agoThis is kind of a bad comparison to make since they're comparing the value of Norway's fund versus the output of Mexico's economy (which would be more like revenue in the context of a company/investment).
- barkingcat 8y agoThe 4 China related/controlled funds add up to over 2 Trillion.
- ceejayoz 8y agoThey've got 265x the population, though.
- tlb 8y agoWhy do people keep comparing assets ($) to GDP ($/year)? If you want to compare the two, 1 year isn't a reasonable term. You can convert a rate into a current asset value by multiplying by a P/E ratio, anywhere from 10 to 20 these days.
- Maybestring 8y agoThe distance from LA to New York is bigger than 2000mph!
- cperciva 8y agoNews media love to do this on a personal level too. Every month CBC runs a story about how Canadians' household debt (mostly mortgages) is 170% of their disposable income. It isn't completely meaningless to compare these, but the units need to be right: Rather than "170%" (which scares people because it's more than 100%!) we should say that household debt is equal to 20 months of disposable income.
- mistermann 8y agoBut that is the same thing, which isn't the case in the article.
- ucaetano 8y agoYeah, I'm genuinely surprised and sad when I see posts like these make it to Hacker News, it just show how ignorant most people are about fundamentals of economics.
- logfromblammo 8y agoOne way to compare would be to say that all of Norway could earn as much money, just sitting on ass all day, every day, as 3% (safe withdrawal rate) of Mexico, working 43 hours a week (actual stat from OECD). Alternately, compare to a country with lower GDP. "Norway (5.3M people) makes as much sitting on its investments as Latvia (2M people) earns working 36.5 hours per week." This has the advantage of comparing a Scandinavian country with a Baltic nation, with cultural and geographic proximity.
- 8y ago
- ucaetano 8y agoThis is a stupid comparison. It is comparing flow vs. storage. This is comparing Joules to Watts. It isn't even wrong. The Mexican economy generates $1 trillion of value per year. The Norway Sovereign Wealth fund has $1 trillion in capital. Over the past 2 years, it seems that Norway's fund generated an average return of about 10% a year. That means Norway's fund is "equivalent" to a $100 billion GDP country, about 1/10th of Mexico.
- digi_owl 8y agoSadly this stock/flow confusion is rampant in economic thinking...
- loeber 8y agoThis compares stocks to flows, which is incorrect and useless. Article dismissed.
- clarkmoody 8y agoThe capital stock of Mexico is estimated at $6.5T (2011 dollars, 2014 estimate)[1]. This is probably a better point of comparison. [1]: https://fred.stlouisfed.org/series/RKNANPMXA666NRUG https://fred.stlouisfed.org/series/RKNANPMXA666NRUG
- jimnotgym 8y agoAnd the UK spent its oil wealth on tax cuts...now the oil has gone and retired people are richer. Woop
- digi_owl 8y agoThe current Norwegian Government is doing pretty much the same...