DEVELOPMENT OF AN ALGORITHM FOR THE COMPILATION OF NATIONAL ACCOUNTS AND RELATED SYSTEMS OF STATISTICS*

The present article includes a proposal for a national accounts algorithm to be applied in the computerization of the national accounts compilation process. While aiming at the estimation and reconciliation of data from different statistical sources, it is based on the application of a linear programming technique applied to a system of identities and inequalities that define the accounting and analytical relations between the data categories of a national accounting framework. The technique is flexible in the sense that it can be used with any configuration of available statistical sources and data requirements of the national accounts. The algorithm is illustrated graphically with help of a simple example and thereafter applied to an extended but still simple national accounting scheme for Suriname with data for 1965 that was compiled by the author many years ago. As the present study is only a first step in the development of the algorithm, more work is needed to make it operational and the last section of the article includes suggestions about the direction of that further work.     

A Bayesian Signals Approach for the Detection of Crises

In this paper, we consider the signals approach as an early-warning-system to detect crises. Crisis detection from a signals approach involves Type I and II errors which are handled through a utility function. We provide a Bayesian model and we test the effectiveness of the signals approach in three data sets: (1) Currency and banking crises for 76 currency and 26 banking crises in 15 developing and 5 industrial countries between 1970 and 1995, (2) costly asset price booms using quarterly data ranging from 1970 to 2007, and (3) public debt crises in Europe in 11 countries in the European Monetary Union from the introduction of the Euro until November 2011. The Bayesian model relies on a vector autoregression for indicator variables, and incorporates dynamic factors, time-varying weights in the latent composite indicator and special priors to avoid the proliferation of parameters. The Bayesian vector autoregressions are extended to a semi-parametric context to capture non-linearities. Our evidence reveals that our approach is successful as an early-warning mechanism after allowing for breaks and nonlinearities and, perhaps more importantly, the composite indicator is better represented as a flexible nonlinear function of the underlying indicators.

     

AN EXAMINATION OF THE FEASIBILITY OF USING MONETARY DATA FOR NATIONAL INCOME ESTIMATES

In a number of underdeveloped countries today, adequate statistics for estimating national output by traditional national accounting methods are unavailable or unreliable. However, many of these same countries do publish data on monetary variables at an early stage in their development. These data can now be used to estimate national income.
In this study the money supply was defined to include all currency in circulation, private deposits subject to check at all banks and postal systems, all government deposits, and unused overdrafts less float. The national accounts data were taken from United Nations sources and data supplied by various foreign statistical offices. To make the accounts more comparable in terms of coverage and to limit reported income to the monetized sector of the economy, non-monetary imputations were deleted.
The monetary and national accounts data were combined in a multiple, stepwise regression. National income was used as the dependent variable and money supply and other data were used as the independent variables. The final estimating equations explained about 96 per cent of the variation in income between countries. Other tests were conducted using the currency ratio, transactions velocity, population, and per capita consumption. However, these variables did not augment the explanatory power of the regression equations.
When the equations were used to estimate national income for twenty-two under-developed countries, the derived estimates showed a high degree of concordance with reported income where it existed for comparative purposes. The results indicate that monetary data can be used to estimate national income for underdeveloped countries with a relatively high degree of accuracy, between countries, and from year to year within a country.     

INTEGRATED ENVIRONMENTAL AND ECONOMIC ACCOUNTING: FRAMEWORK FOR A SNA SATELLITE SYSTEM

National accounts have provided the most widely used indicators for the assessment of economic performance, trends of economic growth and of the economic counterpart of social welfare. However, two major drawbacks of national accounting have raised doubts about the usefulness of national accounts data for the measurement of long-term sustainable economic growth and socio-economic development. These drawbacks are the neglect of (a) scarcities of natural resources which threaten the sustained productivity of the economy and (b) the degradation of environmental quality from pollution and its effects on human health and welfare. In the present paper, the authors attempt to reflect environmental concerns in an accounting framework which maintains as far as possible SNA concepts and principles. To this end, the accounting framework is used to develop a "SNA Satellite System for Integrated Environmental and Economic Accounting" (SEEA). Environmental costs of economic activities, natural asset accounts and expenditures for environmental protection and enhancement, are presented in flow accounts and balance sheets in a consistent manner, i.e. maintaining the accounting identities of SNA. Such accounting permits the definition and compilation of modified indicators of income and expenditure, product, capital and value added, allowing for the depletion of natural resources, the degradation of environmental quality and social response to these effects. A desk study of a selected country is used to clarify the proposed approaches, to demonstrate their application in future country studies and to illustrate the quantitative effects of the use of modified concepts on the results of analysis.     

Benchmarking competitiveness in transition economies

This paper constructs an indicator for the current level of international competitiveness of countries in transition. We find that Hungary is the most competitive country in the group while Turkmenistan is the least. Competitiveness measurement, in our view, is a way to use uniform criteria to gauge the extent to which a country makes use of various levers to promote sustained improvements in its well-being. We construct our measure of competitiveness drawing upon both the popular literature on competitiveness as well as modern economic theory. The approach acknowledges the importance of synergies between firms, markets, and government and, above all, the crucial role of institutions. Our choice of variables stresses the special characteristics of transition countries. By bringing to bear all the existing data on these countries, together with new survey data collected for the purpose, we are able to go beyond the mere ranking of countries to decompose the sources of competitiveness into their constituent parts. This allows policy makers to identify areas where their countries are lagging behind relative to other countries in their region. Our indicator is also compatible with the Global Competitiveness Report series categories, thus allowing us to benchmark transition countries against the rest of the world.
JEL classification: C82, O47, O57, P27, P52.     

Quantifying Bias and Inaccuracy of Upper-Level Aggregation in the Harmonised Index of Consumer Prices for Germany and the Euro Area

Current measurement practices of the Harmonised Index of Consumer Prices (HICP) produce an upward bias of about one-ninth of a percentage point in German inflation due to changing consumption being disregarded and preliminary data being used in the compilation of expenditure weights. The statistical uncertainty produced by these sources of mismeasurement can be illustrated by an interdecile range of about one-quarter of a percentage point. The annual updating of the quantity component of the weights, implemented in 2012, has reduced the substitution component, making the disregard of changing consumption virtually a non-issue for the euro area HICP. The measurement of the German HICP is impaired by the extrapolation of expenditure weights. The use of preliminary national accounts data since 2012 has not led to an improvement. This source of mismeasurement is likely to be relevant for the euro area HICP as well but cannot be quantified due to data constraints.     

A REVIEW OF SELECTED ASPECTS OF THE UNITED NATIONS SYSTEM OF NATIONAL ACCOUNTS IN THE LIGHT OF COUNTRIES’ EXPERIENCES*

A review of the United Nations System of National Accounts and its implementation by countries is presently being conducted at the United Nations Statistical Office. This article presents a personal and selective account by the author of the results of that review and its consequences for the present structure of the SNA. Information is included on the level of response by countries for the tables of the SNA national accounts questionnaire. It shows that this response is at present sparce, except for the tables on GDP by end use, cost structure and kind of economic activity. On the more detailed level the feasibility of introducing integrated sector accounts into the system has been examined and different approaches compared. Country practices suggest that one way of facilitating the introduction of such accounts would be to eliminate one essential feature of the dual classification of the SNA, i.e., the distinction between quasi-corporate and other unincorporated enterprises. Other modifications of the SNA structure implied below are the introduction on a limited scale of articulation of transactions, the inclusion of additional aggregate income and balancing items, a reallocation of data between the main accounts and the supporting tables, and a better integration of the SNA matrix with the accounts and tables of the system. A reduction of the present number of independent classifications in the SNA is suggested, based on links between categories of different classifications that are assumed in country responses to the questionnaire. A suggestion is made for a uniform valuation of goods and services and income flows, to replace the present complex valuation guidelines on approximate basic and factor values and producers’ prices.     

Distributional national accounts for the Netherlands and a comparison with 12 other countries

Most inequality studies rely on micro data that do not capture a substantial share of income identified in the national accounts. In the Netherlands, almost one fifth of household disposable income is missed by current inequality statistics. In this paper, we present inequality statistics for the Netherlands that capture all of household income, so-called distributional national accounts. Compared to the current inequality statistics, the Gini coefficient for disposable income increases substantially from 0.289 to 0.337. Cross-country comparisons show that such a change between Gini coefficients based on micro-data versus Gini coefficients based on distributional national accounts does not apply to all countries. The difference between both Gini coefficients varies not only between countries in the size, but also in the sign of the difference.     

Water accounting for the Orange River Basin: An economic perspective on managing a transboundary resource

The framework for water accounting is applied to an international river basin, the Orange River Basin, which is shared among Botswana, Namibia, Lesotho and South Africa. Each of the riparian states faces water constraints and relies increasingly on shared international water resources. The countries have adopted the principle of an economic approach to water management, once basin human needs are met, and all but Lesotho have constructed national water accounts to assist in water management. The water accounts for the Orange River Basin bring an economic perspective to water management at the regional level. The accounts include supply and use tables, which are used to compare the contribution to water supply from each riparian state to the amount used. The water accounts are then linked to economic data for each country to calculate water use and productivity by industry and country. There are considerable disparities in water productivity among the countries, which should be taken into account in future decisions about water allocation, pricing and infrastructure development.     

Introducing a certified economic accountant (CEA) degree or diploma program: Would Nancy and Richard Ruggles approve?

This paper is inspired by the work of Nancy and Richard Ruggles promoting national economic accounting in academic and non-academic areas. They were concerned with both compilation and use of national accounts as well as developmental issues. Now that the subject has matured with the 1993 SNA standards, the compilation, development and understanding of the accounts require special training and experience, but national economic accounting has become a multidisciplinary matter that cannot easily fit into one academic department. Hence we advocate a Certified Economic Accountant (CEA) degree or diploma program to gain enhanced recognition and greater understanding for national economic accountants and their work. The paper includes an annotated list of 50 references, covering the period 1942–2002, that might form a syllabus, and a section outlining the mechanics and problems of organizing such a program.     

THE UNITED NATIONS SYSTEM OF NATIONAL ACCOUNTS IN THE MIDDLE EAST

After an introduction setting out the general state of work on the national accounts in the Middle East the author considers the principal uses of national accounts statistics in less developed countries. The first group of uses discussed is in connexion with the measurement of growth and the making of international comparisons. The author is of the opinion that in many cases the primary statistical series are so weak that the fact they they are combined together into a series called national income or gross domestic product lends to them a significance which they do not really possess. The real problem is to improve the quality of the primary series. A second use of national accounts statistics is in connexion with fiscal and budgetary policy. In the statistically advanced countries this is one of the most important uses but in the less developed countries budgetary policy has not yet reached a level of sophistication which would call for the use of national accounts data. Moreover, the time factor involved in assembling accurate national accounts estimates militates against their effective use for short term forecasting. The author considers that the most important use for national accounts statistics is to provide a framework for development planning. The United Nations system is not altogether appropriate for this purpose. It grew up primarily as a system for recording income flows but in development planning one is concerned equally with commodity flows with a great deal of attention being focussed upon intermediate products. The proposals of the working group of African Statisticians for an adaptation of the S.N.A. to African countries represents a most important advance in this respect. In the final section of the paper the author advocates a broader definition of capital formation to include developmental expenditure which is not properly defined as fixed capital formation. Education expenditure is cited as an example. It is suggested that in the national accounts it would be desirable to operate with gross concepts. However, the growth of the capital stock is obviously important in less developed countries and it is suggested that statistical techniques be devised to measure it directly wherever possible. Finally, attention is drawn to the ambiguities and weaknesses in the concept of residence as used at present in the S.N.A.     

Reconciling Household Surveys and National Accounts Data Using a Cross Entropy Estimation Method

This paper presents an approach to reconciling household surveys and national accounts data. The problem is how to use the information provided by the national accounts data to re-estimate the household weights used in the survey so that the survey results are consistent with the aggregate data. The estimation approach uses an estimation criterion based on an entropy measure of information. The survey household weights are treated as a prior. New weights are estimated that are close to the prior and that are also consistent with the additional information. This approach is implemented to reconcile household survey data and macro data for Madagascar. The results indicate that the approach is powerful and flexible, supporting the efficient use of information from a variety of sources to reconcile data at different levels of aggregation in a consistent framework.     

An aggregate resource efficiency perspective on sustainability: A Sustainable Value application to the EU-15 countries

The Sustainable Value approach integrates the efficiency with regard to environmental, social and economic resources into a monetary indicator. It gained significant popularity as evidenced by diverse applications at the corporate level. However, its introduction as a measure adhering to the strong sustainability paradigm sparked an ardent debate. This study explores its validity as a macroeconomic strong sustainability measure by applying the Sustainable Value approach to the EU-15 countries. Concretely, we assessed environmental, social and economic resources in combination with the GDP for all EU-15 countries from 1995 to 2006 for three benchmark alternatives. The results show that several countries manage to adequately delink resource use from GDP growth. Furthermore, the remarkable difference in outcome between the national and EU-15 benchmark indicates a possible inefficiency of the current allocation of national resource ceilings imposed by the European institutions. Additionally, by using an effects model we argue that the service degree of the economy and governmental expenditures on social protection and research and development are important determinants of overall resource efficiency. Finally, we sketch out three necessary conditions to link the Sustainable Value approach to the strong sustainability paradigm.     

中国投入产出核算的缺陷及其改进路径

本文首先概述了中国投入产出工作的历史与贡献,继而从现阶段中国投入产出表的编制流程及部分特点出发,借鉴国际标准及部分发达国家的实践经验并考虑我国统计与核算的现实需要,研究了中国投入产出核算存在的主要缺陷。最后,针对这些缺陷和不足,本文提出了从部门分类、核算价格、调查对象、调查方案设计和编表方法等方面改进我国投入产出核算工作的积极并具有针对性和建设性的建议。     

THE ROLE OF NATIONAL ACCOUNTS IN CONJUNCTURAL RESEARCH—THE CASE OF CZECHOSLOVAKIA

This article discusses the revival of interest in research on cyclical behavior in the socialist countries, and the resulting shifting requirements placed upon the national income accounts. The first section discusses the economic experience and the institutional factors leading to this shift in emphasis. The second section deals with the use of national accounts in cyclical analysis, with particular reference to the Czechoslovak experience. The third section extends the discussion to the use of national accounts data for economic forecasting. The final section discusses the theory of economic fluctuations under socialism, and compares it with cyclical behavior in capitalist economies.     

Use Tables for Imported Goods and Valuation Matrices for Trade Margins—an Integrated Approach for the Compilation of the Belgian 1995 Input–Output Tables

This paper describes the compilation of the use table for imported goods and the valuation matrix of trade margins for Belgium in 1995. It introduces the methodological novelty of integrating the compilation of both tables and systematically exploiting the fact that large import and export flows do not generate trade margins. This is notably the case for direct imports for intermediate consumption or investment by non-traders, and direct exports by producers. For identifying these trade flows, extensive use was made of intrastat and extrastat data. The results are compared with those of a proportional distribution of imports and trade margins. Many statistical offices resort to the latter approach because of a lack of survey data on the destination of trade margins and imports. We demonstrate that the integrated approach can improve the quality of both the import matrix and the valuation matrix for trade margins, while using only existing data sources.     

Governments’ payment discipline: The macroeconomic impact of public payment delays and arrears

This paper considers the impact of changes in governments’ payment discipline on the private sector. We argue that increased delays in public payments can affect private sector liquidity and profits and hence ultimately economic growth. We test this prediction empirically for European Union countries using two complementary approaches. First, we use annual panel data, including a newly constructed proxy for government arrears. Using panel data techniques, including methods that allow for endogeneity, we find that payment delays and to some extent estimated arrears lead to a higher likelihood of bankruptcy, lower profits and lower economic growth. While this approach allows a broad set of variables to be included, it restricts the number of time periods. We therefore complement it with a Bayesian VAR approach on quarterly data for selected countries faced with significant payment delays. With this second approach, we also find that the likelihood of bankruptcies rises when the governments increase the average payment period.