Health of Nations Indicator
The Health of Nations Indicator is a first-of-its-kind national rating system that extends beyond the credit-worthiness of a nation to provide insights into the national investment opportunities in both the developed and the emerging world. The models provide clear quantitative insights for investment managers to utilize in their strategic allocation decisions, allowing them to explore investment opportunities beyond the traditional scope.
HoNI outputs are consolidated into the current state of each nation, how strongly their key indicators rank against the other nations in the set, and a detailed timeline showing the progression of their scores over time. With this three-pronged analysis investment managers can augment their decision making process to observe if their investments are on-track with their internal risk metrics and projections.
The primary output displays the nations based on three primary criteria. Their most recent HoNI score (y-axis), current level of capital saturation (x-axis), and total assets in the economy (bubble size). The lower image shows the development of capital saturation compared to the national HoNI score over the previous 20 years. This provides an estimation of whether capital growth has been improving economic indicators overall or causing them to decline.
Paired charts show the breakdown of the three HoNI score sectors and the development of the national score over time. The timeline provides a clear indication whether conditions have been steadily improving, declining, or remaining stagnant. Overlaid on the score outputs is plotted a five-year moving average to better show the relevant trend in economic progress.
The box plot shows the spread of all scores for each sector and highlights how the current country has ranked compared to its peers. The comparison between the current score and the 3-year score provides further insights into which aspects of the economy have most contributed to changes in the national score.
Each economic section provides a focused view of the underlying indices, the overall spreads, and how well the country has scored in each index both currently and three years ago. The scores are generated by setting a minimum, maximum, and mid-point and then applying either a sigmoid function or a polynomial function to the underlying data sets. Polynomial functions are used in cases where either too little or too much has a negative effect on the economy while sigmoid functions are used when increases in the indicator have only positive effects, or applied inversely when "less is more".
