Improving inter-spatial and inter-temporal comparability of national accounts

Abstract

The inter-spatial indices of prices and outputs generated by the UN International Comparison Program (ICP) are not always consistent with the inter-temporal indices compiled by national statistical offices. This paper discussed the issues involved and describes what the World Bank is doing about them. Although the inconsistencies are due to a combination of factors ranging from intractable index number problems, problems associated with compiling inter-temporal indices and those related to measurement of inter-spatial indices, the paper concentrates on concepts and practices of ICP. The paper documents the discrepancies in available data and argues that some of the discrepancies are unavoidable as time-to-time indices of outputs are obtained from series where prices are fixed and quantities vary while the place-to-place indices in ICP benchmark data involve changes both in prices and quantities over time; that others will be reduced as the methods, practices and country coverage of ICP become stable; and that the bulk of the discrepancy results from lack of coordination in the way data are collected for national accounts. Consumer Price Index (CPI) and ICP. The paper concludes that the inconsistencies would be reduced and the remaining discrepancies better understood if there is harmonization and improvement of statistical work related to national accounts. CPI and ICP, and outlines a number of steps in this direction.