ON THE TREATMENT OF TAXES AND GOVERNMENT IN THE NATIONAL ACCOUNTS

Framed in the context of the ongoing revision of the 1993 System of National Accounts (SNA), this note proposes a new presentation of the National Accounts. While it does not require new information, nor difficult calculations, it is suggested to be conceptually clearer and practically simpler. The changes concern the treatment of taxes and government in the national accounts which imply that: (i) GDP, measured at basic price, is now exactly the sum of all value added, which is split in the compensation of employees and an enlarged operating surplus; (ii) the two functions of government are clearly distinguished in a modified sequence of accounts, that is, as producing non-market services up to the allocation of primary income account, and then as redistributing the national income; and (iii) with a conventional allocation of government services and GDP broken down between market GDP and non-market GDP, households remain the only final consumer and the so called question of consumption subsidies is resolved.     

FINANCIAL INTERMEDIATION SERVICES INDIRECTLY MEASURED: ESTIMATES FOR FRANCE AND THE U.K. BASED ON THE APPROACH ADOPTED IN THE 1993 SNA

The 1993 SNA proposes a revised treatment of the output of financial intermediaries which treats intermediation services in part as a component of final demand, so that GDP is higher than the 1968 SNA suggests. In this paper we present the results of attempts to estimate FISIM (Financial Intermediation Services Indirectly Measured) for France and the U.K. The French study uses a reference rate calculated to ensure that no imputation is made with respect to own funds, while the U.K. study relies on a market interest rate. Both studies present an allocation of intermediation services by industry as well as by category of demand. The adjustments to GDP are of similar magnitudes in both countries.