Session 8 – The future of national accounts (I)

Papers by Bent Thage, and Bram Edens, Dirk van den Bergen, Maarten van Rossum, Rutger Hoekstra, Marieke Rensman (CBS)

John VerrinderEurostat

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Overview

Past developments in SNA have increasingly complicated the system, adding less measurable items and more modelling, whilst its implementation is challenged by new phenomena.

Users demand more from national accounts.

Should we re-assess/shrink the "core" SNA and move less measurable items to satellite/periphery accounts?

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Past developments (Bent Thage)

Recent significant SNA changes "largely as a response to the demand for a system that would be better suited for productivity analysis"

"national accounts moved into new territories…largely unknown to national accountants"

"SNA has moved away from the observable real world"

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Past developments (Edams et al)

"…the nature of the economic activities that the system intends to describe has fundamentally changed over the years."

"…balance between measurability and relevance"

"…the SNA may have gone too far"

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The purpose of national accounts

Should there be only one general purpose system?Different user needs imply different approaches…Satellite accounts…but one central systemTension between core accounts and satellites

Two points of view (?)i) SNA is an organisational structure to integrate basic statisticsii) SNA facilitates analysis of the economy and

decision-making

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The demand side for national accounts

Maintaining their relevance, in the face of:

The "new economy" – IT-driven, households as producers, consumption for free.

Globalisation – ownership criterion, divergence between "physical and monetary descriptions of the economy" disrupts environmental and multiregional input/output analysis

Beyond GDP – Complement GDP with additional social, economic and environmental indicators; Stiglitz report; green accounting, wealth accounting, natural capital

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Measurement challenges (I)

Estimation of capital stocks and COFC/capital servicesModel calculation with considerable data needs"… supplementary model-based estimation system that does not share characteristics with the central NA

system."

Ongoing extension of the asset boundary (intangibles) leads to more "non-disposable income" / no prices

Direct output measures of government non-market servicesConceptual objections (?)EU: Direct output measures but no quality adjustments

"half-cooked data"R&D – introduced prematurely (?)

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Measurement challenges (II)

Market pricesTransfer prices (increasing globalisation) and hedge contracts

Volume measurementUnique products (+ intangibles)Direct volume measures (comparable but crude) / Input methods

Non-observed economyIllegal activities (e.g cannabis detection rate)

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What should we do about it?

Both papers suggest a more measurable, higher quality core account, and peripheral/satellite accounts for less measurable items

Bent Thage – clear borderline between "official statistics" and economic modelling/theory (satellite systems).

Edams et al – Replace production boundary by "revenue boundary" (closer to business accounts), exclude imputed items from core (e.g. FISIM), reduce volume focus.

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Reflections

Balance between "core" and "satellites" – will this satisfy users and justify resources?

Do statisticians bring value added to model-based methods? Are we relevant if we don't?

Challenge of new economic phenemona – back to the basics in a complex world?

Move core SNA more towards business accounts?