An Introduction to National Accounts Statistics PDF
Preview An Introduction to National Accounts Statistics
AN INTRODUCTION TO NATIONAL ACCOUNTS ST A TISTICS By the same author BASIC MATHEMA TICS INDEX NUMBERS IN THEORY AND PRACTICE MACRO-ECONOMIC THEORY MATHEMAT ICAL ANALYSIS FOR ECONOMISTS MATHEMAT ICAL ECONOMICS AN INTRODUCTION TO NATIONAL ACCOUNTS STATISTICS R. G. D. Allen © R. G. D. Allen 1980 All rights reserved. No part of this publication may be reproduced or transmitted, in any form or by any means, without permission First published 1980 by THE MACMILLAN PRESS LTD London and Basingstoke Companies and representatives throughout the world British Library Cataloguing in Publication Data Allen, Sir Roy George Douglas An introduction to national accounts statistics 1. National income - Accounting 2. Macroeconomics - Statistical metbods 339.3 HB601 ISBN 978-0-333-30438-9 ISBN 978-1-349-16386-1 (eBook) DOI 10.1007/978-1-349-16386-1 The paperback edition of this book is sold subject to tbe condition that it sball not, by way of trade or otherwise, be lent, resotd, hired out, or otherwise circulated without the publisher's prior consent, in any form of binding or cover other than that in which it is published and without a similar condition including this condition being imposed on the subsequent purchaser Contents Acknowledgement vii THE NATIONAL ACCOUNTS 1.1 Outline of Text 1 1.2 Terminology and References 2 l.3 Publications 3 2 MAIN AGGREGATES: METHOOS 5 2.1 Circular Flow of Income 5 2.2 National Accounts: Concepts and Labels 9 2.3 Treatment of Government 17 2.4 Main Aggregates to be Estimated 21 2.5 Three Measures of GOP at Factor Cost 24 2.6 Components of GOP at Factor Cost 26 2.7 Complications and Conventions 30 2.8 Stock Appreciation 33 2.9 Treatment of Rent 34 3 MAIN AGGREGATES: TABULATIONS 36 3.1 Introduction 36 3.2 Four Gross Product Aggregates 37 3.3 GOP from the Expenditure Side 38 3.4 GOP from the Income Side 40 3.5 Cross-c1assification by Industry and Type of Income 42 3.6 GOP from the Output Side 44 4 SECTOR ACCOUNTS 47 4.1 Introduction 47 4.2 Personal Sector 48 4.3 Corporate Sector 51 4.4 Government 51 4.5 Summary Capital Account 54 v Contents VI 5 BALANCE OF PA YMENTS 56 5.1 Introduction 56 5.2 Visible Trade 57 5.3 Invisibles: Trade in Services 58 5.4 Invisibles: Property Income and Transfers 60 5.5 Balance of Invisibles 63 5.6 Balance of Payments: Drawing the Line 64 6 INDEX NUMBERS OF QUANTITY AND PRICE 69 6.1 Introduction 69 6.2 Laspeyres Form 71 6.3 Paasche Form 73 6.4 Index Numbers in the National Accounts 75 6.5 An Example 77 6.6 Estimation when Quantity Data Lacking 81 6.7 Price Quotations or Unit Values? 83 7 REAL GDP: THREE MEASURES 85 7.1 Real GDP(E): Components 85 7.2 Real GDP(E): Totals 88 7.3 Real GDP(O): Laspeyres Index 91 7.4 Three Measures of Real GDP 95 7.5 Long Runs 97 7.6 Effect of Base Changes 100 8 INDEX NUMBERS OF PRICE 103 8.1 Implied Price Index Numbers 103 8.2 Published Price Data 105 8.3 Various Measures of Inflation 106 8.4 Index Numbers for External Trade 110 8.5 The Terms of Trade and the Trade Gain 112 9 REAL DISPOSABLE INCOME AND EXPENDITURE 115 9.1 Introduction 115 9.2 Real Consumers' Expenditure 115 9.3 Real Personal Disposable Income 118 9.4 Gross National Disposable Income (GNDI) 118 9.5 Real GNDI 120 Index 123 Acknowledgement The author and publishers wish to thank the Controller ofHer Majesty's Stationery Office for permission to include the tables and statistics from government publications. vii 1 The National Accounts 1.1 Outline of Text The first four chapters that follow deal with the money flows of the national accounts, valued at current prices. The emphasis is on the concepts, on methods of estimating the main aggregates and on ways of setting out the sector accounts. Later chapters take up the problem of valuing aggregates in real terms at constant prices and the price index numbers implied by these real measures. There are numerous illus trations throughout, in the form of tabulations taken from official publications. The text is an 'introduction' in two senses. First, it makes no attempt at full coverage of the very extensive and extremely detailed national accounts. It deals at some length with the main aggregates, and with their division into broad components, as set out in the summary tables of the national accounts. It says something about the accounts of the main sectors: personal and corporate sectors, central and local govemment, international transactions in the balance of payments. It goes on to explain what is meant by the summary capital account, and by the complete balance of payments on current and capital account. But no more: there is nothing on sector capital accounts, on ~tocks of fixed capital or on transactions in financial assets. Second, even when a subject is treated fairly fuUy, the text avoids going into fine detail, except where it provides striking illustrations of, or insights into, the methodology of the national accounts. The amount of detail built up in the accounts over years of development is enormous. It is to be seen in the sheer bulk of the official handbook: Central Statistical Office, National Accounts Statistics: Sources and Methods, edited by Rita Maurice (London: HMSO, 1968). Instead of going into detail each time, at several stages the text gives page references to this publication, which is referred to simply as Sources and Methods. 2 An Introduction to National Accounts Statistics It is not enough to illustrate with figures for one particular year. It is equally - indeed more - important to show changes in the aggregates and their components from one year to another. To illustrate the methodology in the early chapters of the text, estimates for 1978 are compared with corresponding figures for 1975. So changes are shown over the interesting three-year period from 1975 to 1978, years ofslow recovery from the bottom of adepression. When changes in real national income and in prices are identified and examined later in the text, a doser look can be taken at economic developments with the aid of figures over a complete cyde from the peak in 1973, through the trough in 1975 and on through the subsequent recovery. 1.2 Terminology and References There are various terms in use for the concepts of the national accounts. There has been, and still is, a fairly widespread preference for the adjeetive 'social' rather than 'national'. Sir John Hicks in his book The Social Framework, 4th edn (Oxford: OUP, 1971) writes of the social income and the social product within a set of social accounts. When it is a matter of calculation or estimation, however, he usually refers to the national income. Dr Stuvel elects to use social rather than national in G. Stuvel, Systems of Social Accounts (Oxford: OUP, 1965). On the other hand, official statistics in this country have used 'national income and expenditure' in their titles since the beginning in the 1940s and the government handbook refers to the 'national accounts'. This is in line with the international practice which has grown up around the following publications: United Nations, A System of National Accounts, Studies in Methods, series F, no. 2 (revision 3), (New York: United Nations, 1968); and OECD, A Standardised System of National Accounts (Paris: OECD, 1959). There is some tendency, in this country at least, to try to get the benefits of both worlds by referring to the national income within the social accounts. Sir Richard Stone illustrates this in J. R. N. and Giovanna Stone, National Income and Expenditure 10th edn, (London: Bowes & Bowes, 1977) and Social Accounting and Economic Models (Bowes & Bowes, 1959). The same is true ofthe well-known text: H. C. Edey, A. T. Peacock and R. A. Cooper, National Income and Social Accounting, 3rd edn (London: Hutchinson, 1967).
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