National Economic Accounting Research Articles

Relationships between national economic culture, institutions, and accounting: Implications for IFRS

Abstract National economic culture has an indirect influence on accounting at the national level through the mediating variable of institutions. The relationships are evaluated using measures of national economic culture from Culture, Leadership, and Organizations: The GLOBE Study of 62 Societies ( House et al., 2004 ); measures of institutions from the World Bank ( Kaufmann et al., 2007 ); and measures of national accounting from the Financial Standards Foundation (2008) . At the national level, institutions are found to mediate the relationship between economic culture variables and accounting. The empirical findings indicate that accounting in a given nation is linked to the nation's supporting institutions, which institutions in turn are influenced by the national economic culture of those who maintain them. This suggests that altering aspects of accounting within a nation can be expected to entail much more than formal adoption of standards, principles, or innovations. Institutional adjustments must be made and the impact of national economic culture must be understood and appropriately addressed.

Intangible Capital and Productivity Growth in Canada

This paper develops a measure of intangible capital and examines the contribution of intangibles to labour productivity growth in the Canadian business sector. It applies the methodology developed by Corrado et al. (2005, 2009) for the United States. The paper finds that investment in intangibles totalled an estimated $151 billion in the Canadian business sector in 2008, which represents 13.2% of gross domestic product in that year. Investment in intangibles has increased much faster than investment in tangibles over time, and the ratio of intangible investment to tangible investment increased from 0.23 in 1976 to 0.66 in 2008. The paper shows that intangibles made a significant contribution to labour productivity growth and that the contribution of intangibles to labour productivity growth was only slightly lower than the contribution of tangibles in the Canadian business sector. The contribution of intangibles to labour productivity growth was lower in Canada than in the United States for the post-1995 period, as a result of Canada’s lower investment in intangibles (software as well as research and development) in recent years.More studies related National Economic Accounts and Macro-Economy and to Productivity are available in Update on Economical analysis.

Learning to Show and Tell Capitalist Style

Mirrors of the Economy: National Accounts and International Norms in Russia and Beyond. By Yoshiko M. Herrera Ithaca, NY: Cornell University Press, 2010. 252 pp., $49.95 hardcover (ISBN 978-08014-4585-9). The collapse of the Soviet Union also saw the end of the particularly Soviet method of national economic accounting. The USSR did not account for its national economic development through the system of national accounts (SNA), the procedure for generating statistical pictures of national economic wealth and development standard in advanced liberal capitalist economies that we take for granted as the means of measuring economic activity. The USSR used the material product system (MPS) and its satellite states followed suit. MPS covered a different range of economic activity to SNA, divided the economy up into different sectors, and had a different headline statistics: where SNA calculates gross domestic product and its components, MPS was concerned with “net material product,” roughly the volume of what was produced, and the balances between economic sectors. The differences between the two systems of national accounting meant that moving from MPS to SNA after the end of communism was a major change both in how statistics were gathered, the use that they could be put to, and the operation and political importance of Goskomstat, the state statistical agency. Such deep-seated and far-reaching change is …

Research Advances and Trends in Ecosystem Services and Evaluation in China

Ecosystem services and value evaluation have become research focus of ecology, ecological economics, environmental economics and other frontier fields; moreover, it is a national economic accounting and an important basis for market operations. At present, studies of ecosystem services falls far from what the nation needs. This paper summarizes progress of Chinese ecosystem services and valuation research during the past decade. We discussed some key issues and future directions in ecosystem services function. An aim of our paper is to provide ideas for the development of ecosystem services and evaluation research in China, and support a more detailed reference for government.

THE TOURISM SATELLITE ACCOUNT: A Primer

The Tourism Satellite Account (TSA) is a popular method of measuring the direct contributions of tourism consumption to a national economy. Its unique role in quantifying economic contributions of visitors in a country derives from its nature as an account rather than a model and its observance of the principles of national economic accounting. This discussion of TSA concepts, definitions and structure, the five macroeconomic variables produced and the special cases of accounting for travel agencies/tour operators, business travel consumption, and tourism specific durable goods is designed to make the TSA accessible to non economic accountants. Research issues yet to be resolved relate to tourism gross fixed capital formation, tourism collective consumption, and subnational TSAs. Finally, standards now distinguishing the TSA from other economic impact methods are recommended.

Clustering and Correlation Analysis of the Industry Networks

Abstract To deeply reveal the structure characters of the real weighted complex networks, their clustering and correlation measures are given and compared from the views of topological and weighted networks respectively. The structure of Chinese national economic industry in 2002 is an example to illustrate. The input-output relevancy complex network of national economic industry departments is established, the clustering and correlation characters of this industry relation network are analyzed by the software tool MATLAB with the input-output data published by the national economic accounting department. Therefore, the input-output relevancy structure characters of the national economic departments in our country are sufficiently explored.

Remember the Magnequench: An Object Lesson in Globalization

Click to increase image sizeClick to decrease image size Notes 1. Jake Tapper, “Hoosier Responsible? Clinton Decries China's Acquisition of Indiana Company – Ignoring Her Husband's Role in the Sale,” ABC News, April 20, 2008, http://abcnews.go.com/Politics/Vote2008/Story?id=4757257&page=1 2. Joe Carlson, “Clinton Let Magnequench Jobs Go To Chinese,” NWI Times, May 1, 2008, http://www.thetimesonline.com/articles/2008/05/01/news/top_news/doc7832950a3328e7fb8625743c0004a528.txt 3. Dan Haar, “No Such Thing as a Free Market,” Hartford Courant, October 2, 2008, http://www.courant.com/business/hc-haarcolumn-1002,0,2840976.column 4. “LPC Tables,” Bureau of Labor Statistics, Department of Labor, http://stats.bls.gov/lpc/#tables, and “National Economic Accounts,” Bureau of Economic Analysis, U.S. Department of Commerce, https://www.bea.gov/national/index.htm. 5. “LPC Tables,” Bureau of Labor Statistics, Department of Labor, http://stats.bls.gov/lpc/#tables, and “National Economic Accounts,” Bureau of Economic Analysis, U.S. Department of Commerce, https://www.bea.gov/national/index.htm. 6. Robert E. Scott, “The China Trade Toll: Widespread Wage Suppression, 2 Million Jobs Lost in the U.S.,” EPI Briefing Paper, no. 219 (Washington D.C.: Economic Policy Institute, July 30, 2008), http://www.epi.org/briefingpapers/219/bp219.pdf 7. Based on a household size of 2.61 people in the U.S. Census’ 2006 U.S. Community Survey. See http://factfinder.census.gov/servlet/ACSSAFFFacts? This excludes costs related to other inputs and differential regulatory burdens. The actual cost per household would almost certainly be higher than $174. 8. Erica L. Groshen, Bart Hobijn, and Margaret M. McConnell, “U.S. Jobs Gained and Lost Through Trade: A Net Measure,” Current Issue in Economics and Finance 11, no. 8 (New York: Federal Reserve Bank of New York, August 2005), http://www.ny.frb.org/research/current_issues/ci11-8.pdf 9. Erica L. Groshen, Bart Hobijn, and Margaret M. McConnell, “U.S. Jobs Gained and Lost Through Trade: A Net Measure,” Current Issue in Economics and Finance 11, no. 8 (New York: Federal Reserve Bank of New York, August 2005), http://www.ny.frb.org/research/current_issues/ci11-8.pdf, p. 6 10. Erica L. Groshen, Bart Hobijn, and Margaret M. McConnell, “U.S. Jobs Gained and Lost Through Trade: A Net Measure,” Current Issue in Economics and Finance 11, no. 8 (New York: Federal Reserve Bank of New York, August 2005), http://www.ny.frb.org/research/current_issues/ci11-8.pdf, p. 6 11. Susan Erler, “Production halted, doors closing at Magnequench Plant,” NWI Times, September 30, 2003, http://nwitimes.com/articles/2003/09/30/business/business/9f898fd15142a5dc86256db00077cc88.txt 12. Magnetic and Electrical Separation, 3 (Gordon and Breach Science Publisher S.A., 1991), pp. 48–49. 13. S. 522: Intellectual Property Rights Enforcement Act, http://www.govtrack.us/congress/bill.xpd?bill=s110-522 14. “LPC Tables,” http://stats.bls.gov/lpc/#tables 15. Chris Isidore, “Michigan's Economic Woes on the Ballot,” CNNMoney.com, January 15, 2008, http://money.cnn.com/2008/01/15/news/economy/michigan_economy_election/index.htm 16. Sasha Issenberg, “Mich. Holds Rhetoric Lesson for McCain,” Boston Globe, January 17, 2008, http://www.boston.com/news/nation/articles/2008/01/17/mich_holds_rhetoric_lesson_for_mccain/ 17. Tom Troy and Larry P. Vellequette, “Manufacturing Losses Exact Rising Toll in Northwest Ohio and Southeast Michigan,” Toledo Blade, July 27, 2008, http://toledoblade.com/apps/pbcs.dll/article?AID=/20080727/BUSINESS09/322675054/0/BUSINESS01 18. These numbers obviously do not reflect illegal migratory workers. 19. Ed Nosal and Michael Shenk, “Is Manufacturing Going the Way of Agriculture,” Federal Reserve Bank of Cleveland, http://www.clevelandfed.org/research/trends/2007/0307/02ecoact.cfm. 20. Joseph Schumpeter coined the term “creative destruction” in Capitalism, Socialism and Democracy (New York: Harper, 1942) to denote a ”process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” 21. Kevin L. Borg, Auto Mechanics: Technology and Expertise in Twentieth-Century America (Baltimore, MD: John Hopkins University Press, 2007). 22. John Tierney, “The Future is Now? Pretty Soon, at Least,” New York Times, June 3, 2008, http://www.nytimes.com/2008/06/03/science/03tier.html 23. Ray Kurzweil, “The Laws of Accelerating Returns,” KurzweilAI.net, March 7, 2001, http://www.kurzweilai.net/articles/art0134.html?printable=1 24. Regarding the Adecco 2008 Labor Day Survey, see “Uncertainty Causing Shift in What's Worrying U.S. Workforce,” WorldatWork, http://www.worldatwork.org/waw/adimComment?id=28056. 25. “LPC Tables,” http://stats.bls.gov/lpc/#tables 26. “American FactFinder,” U.S. Census Bureau, http://factfinder.census.gov/servlet/SAFFSelectIndustry?_event=&geo_id=01000US&_geoContext=01000US&_street=&_county=&_cityTown=&_state=&_zip=&_lang=en&_sse=on&ActiveGeoDiv=&_useEV=&pctxt=bg&pgsl=010&_submenuId=business_2&ds_name=null&_ci_nbr=null&qr_name=null&reg=null%3Anull&_keyword=textile&_industry= 27. Tom Abate, “High-Tech Imports On the Rise: Trade Association Warns State's Exports Declining,” San Francisco Chronicle, July 17, 2007, http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/07/17/BUGOSR1CFD1.DTL&hw=tonelson&sn=001&sc=1000 28. Arthur F. Bentley, The Process of Government: A Study of Social Pressures (Chicago, IL: Chicago University Press, 1908). Additional informationNotes on contributorsCharles W. FreemanCharles W. Freeman III holds the Freeman Chair in China Studies at CSIS and may be reached at cfreeman@csis.org

Development of Future Generations: Oriented Virtual Negotiation Support System for Intergenerational Conflict

Abstract Intergenerational conflict coordination is the fundamental requirement and core of sustainable development. In this paper, through the analysis of the future generations-oriented management mechanisms for intergenerational conflict, the idea of mechanisms and institution building for the coordination and management of intergenerational conflict is put forward. Furthermore, the future generations-oriented virtual negotiation support system (NSS) for intergenerational conflict is developed, built on the analysis of the process simulation of intergenerational wealth transfer, intergenerational equilibrium allocation of resources, and strategies for the mitigation and avoidance of intergenerational conflict, through the application of advanced IT technology. The virtual NSS for intergenerational conflict is helpful to the practical application of the sustainable development theory; on the other hand, it can be applied directly to the intergenerational equilibrium allocation of resources, national economic accounting, formulation of sustainable development strategies and other urgent national economic and social development issues. Finally, the sustainable development theory can be enriched and extended. Therefore, the development of the future generations-oriented virtual NSS for intergenerational conflict has certain theoretical and practical effects on the theory of sustainable development.

The AICCAN, the geGDP, and the Monetisation Frontier: a typology of 'environmentally adjusted' national sustainability indicators

This paper discusses the policy uses, and limits, of three key concepts for defining 'environmentally adjusted' macro-economic indicators for a national economy. The first is change in the system boundary, an enlargement of the scope of national economic accounting to include natural assets; this yields an 'Aggregate Indicator of the Change, during the Current year, in the economic Assets of the Nation' (AICCAN). The second is adjustment of the economy itself, to a new pattern of production processes, levels of production and consumption activity; this yields a 'greened economy GDP' (geGDP). The third, from consideration of the 'openness' of an economy, is adjustment of an AICCAN or geGDP to account for direct and indirect 'inter-country environmental load displacement' associated with trans-boundary pollution flows and trade.

Monetary valuation of livelihoods for understanding the composition and complexity of rural households

There is, at present, little precise understanding of the relative contributions of the various income streams used by impoverished rural households in southern Africa. The impact of household profiles on overall income also is not well understood. There is, therefore, little consideration of these factors in national economic accounting. This paper is an attempt to reduce this gap in knowledge by reflecting on the relative contribution of agro-pastoralism, secondary woodland resources, and formal and informal cash income streams to households in the semi-arid rural village of Thorndale, Limpopo Province, South Africa. In the absence of jobs and confronted with high migrant labor, households with open access to natural resources derived more benefits from land-based livelihoods than cash income streams (i.e., 57.5 % vs. 42.5 %). Total livelihood income was valued at US$2887 per household per annum. A significant correlation between monetary values derived from crops and formal wages was established, and it was found that households with high cash incomes tended to invest more in crop production. Over 80 of households were male-headed. Of these heads of household, more than 60 were long-term migrants to urban areas, leaving household decision-making to the women. The low literacy rates of women have deprived them of paid jobs outside the area and, therefore, have increased their dependence on crops (62%) and secondary woodlands resources (60%). This was further reflected in the proportion of households in which females were the main contributors of cash income (9.7%), or joint contributors with men (24.4%). Various positive correlations were established between the number of women per household and the three land-based livelihoods. This implied that women’s total control over such activities was mostly a result of the absence of men and not a typical phenomenon. In spite of this control, it was not positively reflected in the lives of majority of the women. Households differed in their participation in livelihood activities. Household size influenced the level of production and was positively correlated with the value of secondary woodland resources and crops. The study shows the interdependence of land-based livelihood sources and the impact of household features on production and consumption. Policies that focus on livelihood options need to recognize and accommodate associated household dynamics.

Introducing a certified economic accountant (CEA) degree or diploma program: Would Nancy and Richard Ruggles approve?

This paper is inspired by the work of Nancy and Richard Ruggles promoting national economic accounting in academic and non‐academic areas. They were concerned with both compilation and use of national accounts as well as developmental issues. Now that the subject has matured with the 1993 SNA standards, the compilation, development and understanding of the accounts require special training and experience, but national economic accounting has become a multidisciplinary matter that cannot easily fit into one academic department. Hence we advocate a Certified Economic Accountant (CEA) degree or diploma program to gain enhanced recognition and greater understanding for national economic accountants and their work. The paper includes an annotated list of 50 references, covering the period 1942–2002, that might form a syllabus, and a section outlining the mechanics and problems of organizing such a program.

Problems related to the development of integrated systems for economic and environmental accouning: a preliminary analysis of the economic-environmental impact of human activities on the marine pollution in the Basilicata region

The efforts made during the last years to analyze the interrelations between economy and environment, suggest defining and constructing standardized integrated systems for national economic and environmental accounting. The methodologies that currently exist are not fully developed and involve numerous theoretical and applicative problems that limit, and delay considerably, the construction of such systems. In this article an alternative approach to the analysis is suggested, which aims to attribute environmental problems to the economic activities that generate them. In particular, a complex procedure of explanatory analysis carried out on a regional scale is suggested. Based on environmental measurements already performed all over the national territory, the procedure identifies territorial and environmental characteristics and latent variables, as well as the variety of the intricate phenomena in a way that is compatible with the requirements of the national schemes for economic an environmental accounting. References are given to environmental variables on a regional scale that have not been previously considered in ISTAT’s current NAMEA projects and that can be obtained faster.

Direct use values of communal resources in Bokong and Tsehlanyane in Lesotho: whither the commons?

SUMMARY This paper presents a comprehensive assessment of the contribution of communal resources to households in Bokong and Tsehlanyane in Lesotho. It argues that communal resources are an extremely important element in the livelihoods of people in the study area. It uses households as units of analysis in order to gain an understanding of the role that communal resources play at the micro level before any extrapolations are made to the regional and national levels. A household survey, guided by a detailed semistructured questionnaire, was used. Ten newly constructed houses and vegetable garden enclosures were sampled to categorize and count all poles used to build them. The amount of thatch grass used in building those houses was also estimated. The results indicated that communal resources play a central role in the livelihoods of people in the area with firewood ($1492), crops ($1363) and wild vegetables ($774) recording the highest annual use values per household−1 yr−1. The total present value was estimated at $3899 household−1 yr−1 with firewood, crops and wild vegetables constituting 93% of that value. The study further demonstrated that communal resources are used across the entire income spread in the area, thereby negating the general belief that they are a preserve of the poor. Finally, the results demonstrated that very little value is derived through trading of resources both within and outside the area but through direct consumption within households invariably escaping national economic accounting. With declining employment rates in Lesotho due to continued retrenchments in the South African mining industry, communal resources in the country remain an indispensable resource that must be carefully managed for the common good.

Nature's Numbers: Expanding the National Economic Accounts to Include the Environment

In order to really see the forest, what's the best way to count the trees? Understanding how the economy interacts with the environment has important implications for policy, regulatory, and business decisions. How should our national economic accounts recognize the increasing interest in and importance of the environment? Nature's Numbers responds to concerns about how the United States should make these measurements. The book recommends how to incorporate environmental and other non-market measures into the nation's income and product accounts. The panel explores alternative approaches to environmental accounting, including those used in other countries, and addresses thorny issues such as how to measure the stocks of natural resources and how to value non-market activities and assets. Specific applications to subsoil minerals, forests, and clean air show how the general principles can be applied. The analysis and insights provided in this book will be of interest to economists, policymakers, environmental advocates, economics faculty, businesses based on natural resources, and managers concerned with the role of the environment in our economic affairs.

New Directions in National Economic Accounting

The national income and product accounts (NIPA) are the most important measures of overall economic activity for a nation. Much as a satellite in space can survey the weather across an entire continent, so can the GDP give an overall picture of the state of the economy. Nevertheless, since their inception, there have been concerns that the accounts are incomplete and misleading because they omit vast continents of nonmarket activity such as unpaid work, the value of leisure time, investment in human capital, and most recently, the environment. The threshold question is: why should we devote scarce intellectual resources to studying nonmarket sectors? The basic insight behind nonmarket accounts is that economic and social welfare does not stop at the market’s border, but extends to many nonmarket activities. Three particular areas are worth emphasizing. One important reason why we need better measures of nonmarket activity is because we spend increasingly fewer of our lifetime hours in market activities. A second and more speculative reason concerns the growing importance (or at least the great importance) of nonmarket assets or mispriced market assets such as the environment and technology. A third point is that current measures of national saving and investment are highly defective. The examples later in this paper address each of these issues. Many of these issues were reviewed in a recent report on augmented accounting by the National Academy of Sciences (see Nordhaus and Edward Kokkelenberg, 1999).

Nature’s Numbers: Expanding the National Economic Accounts to Include the Environment.

Review: Nature’s Numbers: Expanding the National Economic Accounts to Include the Environment. By William D. Nordhaus and Edward C. Kokkelenberg, editors Reviewed by Steve T. Schroeder San Diego State University, USA Nordhaus, William D. and Kokkelenberg, Edward C., Editors. Nature’s Numbers: Expanding the National Economic Accounts to Include the Environment. Washington, D.C.: National Academy Press, 1999.250 pp. US$44.95, hard cover. ISBN: 0-309-07151-8. The National Academy of Sciences undertakes a review of environmental accounting with the results presented in Nature’s Numbers: Expanding the National Economic Accounts to Include the Environment. Identifying and assessing value for nonmarket accounts such as air and water quality, biodiversity, health, enjoyment of the natural environment, and other environmentally related concepts is a difficult task at best. However, Nature’s Numbers takes on the challenge and does a respectable job dealing with somewhat abstract concepts of incorporating environmental value into the national balance sheet. In fact, this book is quite revolutionary, given that previously neglected or inaccurately identified nonmarket environmental resources and/or costs should and can be more clearly valued in a tangible economic form. The book begins with a fairly technical assessment of various accounting methods used for environmental resources. It compares and contrasts methods, targeting key strengths and weaknesses. For example, the Bureau of Economic Analysis (BEA) currently uses five valuation methods for assessing subsoil mineral resources, none of which is identified as a standardized or preferred method. Critical to correct valuation of any natural resources are accurate data, which in many cases has to be inferred or is lacking. It is recommended that the BEA maintain significant efforts to improve accounting techniques for domestic mineral assets. An improved accounting system of national resources would allow policy makers to better assess trends in resource scarcity, and thus more effectively manage these resources. Better policies could improve chances that future generations will not be lacking vital resources as a result of today’s mismanagement. Other countries’ techniques for accounting environmental resources are also examined. The chapter, Accounting for Renewable and Environmental Resources, deals with determining interactions between natural resources, the environment, and economic activity. A main point is that this interaction of environmental

Réforme de la PAC et permanence des concepts de comptabilité nationale

CAP reform and permanence of national accounting concepts The CAP reform will bring about a noticeable increase in direct grants to farmers, intended to make up for income losses due to price falls (arable crops, cattle breeding). Therefore important consequences should arise in accounts for agriculture). In order to really appreciate their meaning, we must first consider how national economic accounting is led to analyse such grants, regardless of principles and methodological choices which have been taken for the present (1980) basis. Those aids bring up three important questions to the national accountant : do they constitute subsidies ? which ones could be considered as subsidies on products? what amount should be recorded under the accounts for a given year ? Possible changes connected with the re-basing may result in two important consequences for agricultural accounts : one is in the method for recording output, the other in the definition of time of recording for transactions. Output could be recorded at basic price, which is obtained by adding subsidies on products to the producer's price and by deducting taxes on products. The general principle for time of recording for transactions should become the accrual accounting, i.e. the time when liabilities and claims connected to transactions are ascertained.

Doubling sockeye salmon production in the Fraser River—Is this sustainable development?

We evaluate a proposal to double sockeye salmon production from the Fraser River and conclude that significant changes will be required to current management processes, particularly the way available catch is allocated, if the plan is to be consistent with five major principles embodied in the concept of sustainable development. Doubling sockeye salmon production will not, in itself, increase economic equity either regionally or globally. Developing nations may actually be hindered in their attempts to institute other, nonsalmon fisheries in the North Pacific Ocean as a result of the possible interception of salmon. Further, other users of the Fraser River basin will have to forgo opportunities so that salmon habitat can be conserved. If doubling sockeye salmon production is to meet the goal of doing more with less, it will be necessary to develop more efficient technologies to harvest the fish. If increasing salmon production is to reflect the integration of environmental and economic decision making at the highest level, then a serious attempt must be made to incorporate environmental assets into national economic accounting. Finally, to promote biodiversity and cultural self-sufficiency within the Fraser River basin, it will be important to safeguard the small, less-productive salmon stocks as well as the large ones and to allocate a substantial portion of the increased production to the Native Indian community. In the 1987 the World Commission on Environ- ment and Development (WCED 1987) drew attention to accelerating loss of resources and growing poverty throughout the world. The WCED was optimistic, however, that these distrubing trends could be halted and reversed, provided most nations adopted a phi- losophy of sustainable development. Sustainable de- velopment, as defined by WCED, is development that meets the needs of the present generation witbout compromising the ability of future generations to meet their own needs. This was not an antidevelop- ment solution. In fact, the WCED argued that the environmental problems of developing countries could only be solved through continued and large- scale economic growth. Canada has formally embraced sustainable devel- opment as a principle to guide development at both the federal and provincial levels of government. Even

LINKAGES BETWEEN MACRO AND MICRO BUSINESS ACCOUNTS: IMPLICATIONS FOR ECONOMIC MEASUREMENT

The paper shows the relationship between microbusiness accounting based on double‐entry bookkeeping and macroeconomic accounting based on quadruple‐entry bookkeeping. In order for microaccounts to successfully aggregate into macroaccounts (i.e. preserve macro/micro linkages), quadruple‐entry bookkeeping requires that the traditional double entries, recorded by transacting microbusiness units, be “consistent” with each other. In fact national economic accounting implicitly assumes that such consistency is maintained when national “aggregates” are uniquely extracted from national accounts and when national “identities” are claimed to hold true.The main purpose of the paper is to show important examples where quadruple‐entry consistency is not satisfied. These examples typically involve “complex” economic transactions between business units in which the legal form of the transactions do not necessarily represent their economic substance. When this occurs, different business units have genuinely divergent conceptions and perceptions with respect to their mutual economic transactions. Therefore, microbusiness accounts cannot be successfully aggregated into macroeconomic accounts without violating the integrity of microdecision making records.The conclusion of the paper introduces a new theory called Perpetual Imbalanced Accounting. The theory shows that inconsistent (or imbalanced) economic accounting does tend to become consistent (or balanced) over sufficiently long time periods. Therefore, we must adopt a more dynamic view of national accounting if we desire to preserve successful macro/micro linkages. However, the problems of imbalanced macroaccounting and its statistical consequences cannot be entirely avoided no matter how long the accounting time period is taken. All of the above have important implications for the revision of the United Nations System of National Accounts.

Improving the Methodology of the National Economic Accounting of Services

The development of accounting indicators and methods that unify material production and the nonproductive sphere of the economy is a pressing problem in the analysis and planning of socialist reproduction. This means the more complete inclusion of service branches in the system of macroeconomic indicators that in general form characterizes the dynamics of development of the national economy and the volume of resources drawn into the economy and the effectiveness of their utilization.