Historical National Accounting Research Articles

Maddison‐style estimates of the evolution of the world economy: A new 2023 update

AbstractThis paper surveys the literature on historical national accounting, discusses the importance of relative income benchmarks for, in particular, historical income estimates, and presents an update of long run global economic development with a new version of the Maddison Project Database (MPD). As benchmarks are central to methodologies for global income comparisons over time, and therefore vital to MPD, we analyze the consequences and biases of three benchmarks, the 1990 benchmark, the 2011 benchmark and the multiple benchmark method following the recent Penn World Tables (PWT) methodology, for pre‐1940 income estimates. We develop a methodology to determine which benchmark in combination with time series produces the best anchor for the historical income estimates in the MPD. We conclude that the best way forward for the Maddison Project is to stick to the original 1990 benchmark, yet with two important changes. First, we integrate the 2011 benchmark for the post‐1990 period, and second, we fine tune the dataset for the pre‐1940 period by integrating a new historical benchmark for the US/UK comparison in 1909. By integrating more benchmarks, the MPD moves closer to a multiple benchmark approach as developed by the PWT.

Modifying the success story of Sweden: Revised output and labour productivity figures for manufacturing, 1869–1950

AbstractThe rampant growth rate of output and productivity in manufacturing borne out by Swedish Historical National Accounts (HNA) has nurtured the notion that the Swedish rise to prosperity was propelled by the confluence of disproportionately high levels of sophistication and very low levels of output per worker. The thrust of the argument is that this unique configuration allowed Sweden to leapfrog into modernization. The time has come to put this arresting claim under scrutiny, which is the foremost aim of this paper. This claim, we argue, is founded on a questionable empirical foundation. The most frequently used series of outputs from manufacturing at large and from groups of industries are those of the Swedish HNA. For several reasons, these series are inappropriate to use in studies assessing the rate of output and productivity increases before 1950. We have established new series of output and labour input for manufacturing at large between 1869 and 1950 that are suitable for investigations of productivity growth rates. The resulting series significantly raises the level of output per worker in the early part of the period and hence lowers the estimated growth rates of productivity for the era as a whole.

Historical national accounting and dating the Great Divergence

AbstractBy offering a particular interpretation of the new evidence on historical national accounting, Goldstone argues for a return to the Pomeranz (2000) version of the Great Divergence, beginning only after 1800. However, he fails to distinguish between two very different patterns of pre-industrial growth: (1) alternating episodes of growing and shrinking without any long-term trend in per capita income and (2) episodes of growing interspersed by per capita incomes remaining on a plateau, so that per capita GDP trends upwards over the long run. The latter dynamic pattern occurred in Britain and Holland from the mid-fourteenth century, so that Northwest Europe first edged ahead of the Yangzi delta region of China in the eighteenth century.

China, Europe, and the Great Divergence: A Study in Historical National Accounting, 980–1850

As a result of recent advances in historical national accounting, estimates of GDP per capita are now available for a number of European economies back to the medieval period, including Britain, the Netherlands, Italy, and Spain. The approach has also been extended to Asian economies, including India and Japan. So far, however, China, which has been at the center of the Great Divergence debate, has been absent from this approach. This article adds China to the picture, showing that the Great Divergence began earlier than originally suggested by the California School, but later than implied by older Eurocentric writers.

ECONOMIC DEVELOPMENT IN AFRICA AND EUROPE: RECIPROCAL COMPARISONS

ABSTRACTRecent advances in historical national accounting have allowed for global comparisons of GDPper capitaacross space and time. Critics have argued that GDPper capitafails to capture adequately the multi-dimensional nature of welfare, and have developed alternative measures such as the human development index. Whilst recognising that these wider indicators provide an appropriate way of assessing levels of welfare, we argue that GDPper capitaremains a more appropriate measure for assessing development potential, focussing on production possibilities and the sustainability of consumption. Twentieth-century Africa and pre-industrial Europe are used to show how such data can guide reciprocal comparisons to provide insights into the process of development on both continents.

Norwegian GDP by Industry 1830-1930

The present paper offers new knowledge of historical national accounting in Norway in several ways. Firstly, a new and novel set of annual gross domestic product series by industry are presented for the period 18301930. Secondly, the new estimates suggest revision of the historical national accounts published by Statistics Norway. Thirdly, this may lead to necessary revisions of both Norwegian industrial history and business cycle history.

COMPARING PER CAPITA INCOME IN THE HELLENISTIC WORLD: THE CASE OF MESOPOTAMIA

Until quite recently, GDP growth between ca. 1ceand the late Middle Ages was considered non‐existent or even negative. Recently, largely on account of increasing interest in historical national accounting, the late‐medieval figures have been revised upward, in line with an upward adjustment in the estimated shares of manufacturing and pasture. Leaving GDPs dating from the ancient world unaltered would consequently generate figures indicating increased economic growth during the first millenniumce. A considerable number of studies of the late‐medieval period (the object of increasing attention on the part of specialists in early economic history) have caused estimates for the ancient one to be revised upwards, essentially leaving estimates of the changes in economic development over time unaltered. These studies, however, have focused on the Roman Empire and Italia while there is a consensus in the literature that it was quite unrepresentative of all ancient societies with its relatively high share of GDP from the manufacturing sector of the economy. We therefore estimate a new per capita income for another contemporary agrarian society: ancient Mesopotamia. In addition, by examining manufacturing and pasture—the two main reasons for higher income which have been identified in the literature—we have found a tentative explanation for the fact that ancient Mesopotamia's per capita income deviated from that of Rome.

After-tax Valuation of Convertible Bonds and Participation Exemption

This paper studies the after-tax valuation of convertible bonds in the light of Europe's participation exemption (PEX) rules and International Financial Reporting Standards (IFRS). The focus is on Italy's representative case. PEX rules exempt from company taxation capital gains realized by companies selling stocks. PEX rules raise the value of convertibles as investor companies can strategically convert the bond into stock to enjoy PEX. Historical cost-based national accounting standards imply taxation upon realization and valuable tax timing options (TTOs). ‘Fair value’ based IFRS entail mark-to-market taxation, which ‘kills’ TTOs, but investor companies can convert the bond early in order to enjoy PEX. Early conversion can be valuable.

Swedish Historical National Accounts, 1800–2000: Principles and Implications of a New Generation

A new set of data and estimates of historical national accounts for Sweden is concluded with the project Structural Change in the Swedish Economy, 1800–1980: Construction and Analysis of National Product Series. This article provides a short overview of earlier efforts, beginning in the 1930s, to construct historical national accounts and an account of the present project. The new estimates resulted in partly new representations of economic growth and change. They are also compared with earlier data. Furthermore, effects of the deflation techniques ( i.e., double deflation) are analyzed by comparing the series with those resulting from single deflation. Finally, structural changes are analyzed using modern time series analysis.

Swedish historical national accounts: The fifth generation

The study of economic growth is arguably the central object of economic history. Our most comprehensive measure of economic growth relies on historical national accounts (HNA). The theoretical underpinnings of present day national accounts have evolved since the first attempts by Gregory King in the seventeenth century and have now become standardised according to the rules of the UN's system of national accounts (SNA). Though grounded in economic theory the SNA system rests in many cases on quite arbitrary definitions that are far from obvious or involve theoretical inconsistencies, as has been pointed out for example by Eisner (1988) and Shaikh and Tonak (1994). This arbitrariness concerns such issues as how to draw the boundary between economically productive activities and forms of private and social consumption, how to account for non-marketed economic activities and how to handle the ‘services’ provided by durable goods.

New Research in Historical National Accounting

New Research in Historical National Accounting

Towards European historical national accounts

Abstract This paper provides a bird's-eye view of recent developments in historical national accounting in Europe. It focuses on the application of historical national accounts for the study of long term economic growth. It sets out the major problems encountered which affect the comparability of the available national accounts, namely weighting procedures, the treatment of services and the inconsistencies between the accounts and historical benchmark comparisons of output and productivity levels. Finally, the paper makes some suggestions for a research agenda in historical national accounting, which include the extension of geographical coverage to include the Central and Eastern European countries.

Nordic historical National Accounts since the 1880s

Abstract In many respects the history of National Accounts (NA) and of Historical National Accounts (HNA) is common to all the Nordic countries, The first rudimentary accounts can be found by the end of the nineteenth century while the first income tax statistics of the early twentieth century provided a further stimulus. It was the 1920s and the 1930s, however, that saw the real breakthrough. In Sweden it took the form of HNA, and in the other countries the form of NA, with Denmark and Norway in the lead. The commodity-flow method provided the common characteristic. Later developments somewhat differed in the individual countries. All participated in the Kuznets project ofHNA. Denmark and Norway had obtained new series by the mid 1960s and the early 1970s. Sweden and Finland came later, at the end of the 1980s, and consequently today have the most up-to-date series. These though reveal differences in methodology and a new project has been started, whose aim is to revive the spirit of Nordic community.

The national accounts for Italy, Spain and Portugal

Abstract The paper deals with the development of historical national accounting in Italy, Spain and Portugal - three Latin countries with. generally speaking, the same statistical tradition. We present a detailed account of the literature with a critical assessment of the existing series and an agenda for further research. Italy is the country with a longer tradition in historical national accounting. while Portugal is just beginning to produce historical estimates. For each country we select the best existing estimates, that are published here for the first time - including a complete new set of output estimates for Portugal. We find a common pattern of GDP growth for all three countries - an intriguing feature that will deserve more attention in the future.

Some remarks on the use of prices when constructing volume series

Abstract In the intermittent debate over the revision of the Danish historical national accounting data, the question is sometimes raised as to how an intensified empirical effort, along with a reprocessing of the available data, might contribute to the construction of a second generation of national product and income series, which may be expected to become one of this decade's research fields in Danish economic history. The issue was last ventilated vigorously by G. Viby Mogensen,1 and has, by the way, gained additional prominence by the considerable efforts which English and Swedish economic historians have made in this field during the most recent years.