A Perspective on the Accuracy of Economic Observations

In 1950 appeared the first edition of Oskar Morgenstern's Famous book, The Accuracy of Economic Observations. Nearly half a century later it is timely to return to Morgenstern's diagnosis and to contemplate his therapeutic recommendations. Morgenstern's vision can and should inform the consideration of the topic today because of the continued validity of many of his findings. His work still provides stimuli for studying the general problems of measurement, the varying requirements for accuracy, the issues of aggregate macroeconomic measures, and the prospects for economic and social measurement. This is so even if some of the bleaker assessments by Morgenstern, notwithstanding their technical merits, provide little or no practical guidance for statistical activities. In this context it is enlightening to recall the different practical attitudes adopted by Keynes and by some of his contemporaries in Germany regarding theoretical difficulties with aggregate macroeconomic data.     

THE PRIMARY, SECONDARY, TERTIARY AND QUATERNARY SECTORS OF THE ECONOMY

The recognition of differences among the major sectors of the economy, such as agriculture, commerce, or manufacturing, has a considerable tradition in economic thinking. Also, there is evidence that important national and international predicaments of our time are closely related to sectoral-structural developments. Yet economists in the developed countries are often disinclined to study the shifts among the megasectors.
This paper suggests that an intensified study of the topic may be profitable. In order to support this proposition it first reflects on the traditions of sectoral emphasis in literature. Second, it considers the evidence for the ascendancy of the quaternary activities. Third, it deals with the input-output relations among the four megasectors of the economy. Thereafter it points to the emergence of potential inefficiencies among quaternary activities and raises the possibility of a megasector misequilibrium. Finally it outlines certain connections to the thoughts of Leontief and Sraffa; considers services in the neoclassical framework; explores the relationships to institutional thought; and ponders the extension of its basic hypothesis to the developing nations, the socialist countries, and to historical analysis.     

OUTPUT AND PRICES IN THE INTERNATIONAL COMPARISON PROJECT*

In this paper we discuss a few of the problems that have been encountered in defining output and in comparing prices for the International Comparison Project (ICP). We report also on the way in which these problems are being met. The ICP has for its purpose the establishment of a systematic set of procedures for making international comparisons of gross domestic product (GDP) and of the purchasing power of currencies. Substantive work on comparisons involving Colombia, the European Economic Community (EEC), Hungary, India, Japan, Kenya, the United Kingdom and the United States is also being carried on with the aid of the statistical services of the countries and of the EEC. It is hoped to expand the comparisons beyond these countries as rapidly as possible.