National Income Accounts Research Articles

ASEAN: A Chronicle of Shifting Trade Exposure and Regional Integration

The paper characterizes trade exposure and regional integration in six ASEAN economies during 1997-2008. For this, the paper uses the 2000 Asian Input Output Tables which are extrapolated using National Income Accounts and COMTRADE data. On the demand side, the paper shows that the level and geographical nature of external exposure varies across the ASEANs, and has changed over time. In particular, there was a shift in the external demand exposure of ASEANs from mature markets, including the United States, to China and ROW. In addition, the share of China in East Asia's final demand, especially investment, rose sharply while that of Japan fell. On the supply side, the paper documents the rise of China into a global factory and the steady shift in regional production and integration from Japan and the United States to China.

Consumption and Demand

American Journal of Agricultural EconomicsVolume 91, Issue 5 p. 1176-1186 General Session Consumption and Demand Rulon D. Pope, Rulon D. Pope professor of Economics Brigham Young UniversitySearch for more papers by this author Rulon D. Pope, Rulon D. Pope professor of Economics Brigham Young UniversitySearch for more papers by this author First published: 01 December 2009 https://doi.org/10.1111/j.1467-8276.2009.01342.x The author would like to thank Daniel Sullivan for assistance. Fellows Address was presented at the 2008 AAEA annual meeting in Milwaukee, WI, August 2009. Invited addresses are not subjected to the journal's standard refereeing process. Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Volume91, Issue5December 2009Pages 1176-1186 RelatedInformation

Seeking Parts, Looking for Wholes

The founders of national income accounting in the mid-twentieth century conceived their methods as relevant for “developed” economies and were not initially convinced that such an accounting framework would be useful to measure countries that were “less developed”. The difficulties posed by a lack of statistics were such that a cadre of young economists were sent to make observations in the field. Three such episodes - in colonial and post-colonial Africa - show that the problem was not so much lack of data, as lack of fit. Observations on African economic life either had to be made to fit existing definitions (in the national income accounting rule book), or the definitions had to be changed to fit economic life as it was found. Only then could reliable measurements could be recorded from those observations: measurements of the whole depended upon observing the parts.

Comment: The nature of the ADAS model based on the ISLM model

Rao suggests that the Rowan demand curve does not exist but that result is obtained through treating the system as a simultaneous equation problem that will inevitably obtain the standard aggregate demand (AD) result. The Rowan procedure is a conditional function that makes planned AD conditional on planned aggregate supply (AS)--a quintessential Keynesian process. This results in an AS-dependent AD curve that is upward sloping. This system can be shown to be stable, have a firm connection to measures of national income accounting without dependence on notions of equilibrium and implications for econometric estimations. Copyright The Author 2009. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.

Classification of Wealth from Arthasastra - Macroeconomic Perspective

In general, economics and finance text books seem to ignore the types of wealth that do exist except as ‘assets’ classified into ‘natural or man-made or fixed or current or tangible or intangible or short term or long term or white or black or intellectural assets or as personal property, monetary savings, and capital wealth of income producing assets. Macro economic theory and development economics miss these various types of wealth that have serious macro economic and development implications including national income accounting. This paper proposes a classification of wealth and success especially from the macro economic dimension based on Arthasastra, the science of wealth, an Indian economic thought.

Competition and Corporate Tax Avoidance: Evidence from Chinese Industrial Firms

This article investigates whether market competition enhances the incentives of Chinese industrial firms to avoid corporate income tax. We estimate the eects of competitiveness on the relationship between firms’ reported accounting profits and their imputed profits based on the national income account. To cope with measurement errors and potential endogeneity, we use instrumental variables, exogenous policy shocks and other robustness analysis. We find robust and consistent evidence that firms in more competitive environments engage in more tax avoidance activities. Moreover, all else equal, firms in relatively disadvantageous positions demonstrate stronger incentives to avoid corporate income tax.

Intangible Assets and National Income Accounting: Measuring a Scientific Revolution

In this paper the author relates the measurement of intangibles to the project of measuring the sources of growth. He focuses on three related and difficult areas of the measurement of national income: the measurement of new goods, the deflation of intangible investment, and the divergence between the social and private valuations of intangible assets. The author argues that the economic theory and practice underlying measurement of these items is currently controversial and incomplete, and he points toward how concretely to move forward.

Intangible Assets and National Income Accounting

In this paper I focus on three related and difficult areas of the measurement of national income. I argue that the economic theory underlying measurement of these items is currently controversial and incomplete.

Do factor shares reflect technology?

This note demonstrates that it is still possible to identify the economy’s technology from national income accounting data when wages are set through a bargaining process rather than the usual competitive mechanism. Applying the method to US data, we obtain that the output elasticity with respect to capital exceeds 0.5.

On the Rental Price of Capital and the Profit Rate: The Perils and Pitfalls of Total Factor Productivity Growth

This paper considers the implications of the conceptual difference between the rental price of capital, embedded in the neoclassical cost identity (output equals the cost of labor plus the cost of capital), which is used in growth accounting studies; and the accounting profit rate, which can be derived from the National Income and Product Accounts (NIPA). The neoclassical identity is a ‘virtual’ identity in that it depends on a series of assumptions (constant returns to scale and perfectly competitive factor markets). The income side of the NIPA also provides an accounting identity for output as the sum of the wage bill plus the gross operating surplus. This identity, however, is a ‘real’ one, in the sense that it does not depend on any assumption and thus it always holds. It is shown that because the neoclassical cost identity and the income accounting identity according to the NIPA may be expressed as formally equivalent expressions, estimations of aggregate production functions and growth accounting studies are tautologies. Likewise, the test of the hypothesis of competitive markets using Hall's (1988) framework gives rise to a null hypothesis that cannot be rejected statistically. Finally, it is argued that the NIPA identity does hold in constant prices, pace Denison (1972a, 1972b).

Improving the measurement of health system output growth

National income accounting practice is to weight health service activities by their cost so that they can be aggregated into an output index. Quality changes are ignored. We propose an 'ideal' value weighted output index in which the value attached to each output reflects its contribution to health outcomes and other characteristics valued by patients. Calculation of the index for the health system as a whole is currently infeasible because of a lack of data, especially on health outcomes. We demonstrate alternative ways of combining health outcome data with existing information on post-treatment survival, life expectancy and waiting times to construct quality adjusted cost weighted and health outcome weighted indices for a small set of hospital activities for which there are health outcome data.

Natural resources accounting: A tool for water resources management in Botswana

Natural Resource Accounting (NRA) has become an important environmental/natural resources management tool in recent years. It provides information on stocks of a resource available at a particular point in time and what activities the resource is being used for. The conventional System of National Income Accounts (SNA) normally does not capture the cost of depletion, degradation or pollution of natural resources. This encourages unsustainable use of natural resources since the costs are not reflected when assessing the country’s economic performance or development progress. NRA is thus an attempt to integrate environmental issues into the conventional national accounts. The water sector is one sector that could greatly benefit from this natural resource management tool. Botswana has adopted NRA as a natural resource management tool and has so far developed accounts for minerals, livestock and water. The focus of this paper is on Water Accounting (WA) in relation to Integrated Water Resources Management (IWRM). IWRM is concerned with coordinated development and management of water in order to maximise economic and social welfare without compromising the sustainability of ecosystems. WA helps fill data gaps since it provides the required information for IWRM to be achieved. The aim of this paper therefore is to evaluate the Water Accounts of Botswana Report of 2006 to determine the extent to which it can contribute to integrated water resources management. The paper is based on literature review and the results show that: the available water stocks vary depending on rainfall patterns, well fields are over utilised, there has been growth in consumption, and more than 80% of the waste water produced is not being put to use. These results calls for changes in policies, role of institutions and practices pertaining to water resources management which is what IWRM is all about hence the paper concludes that indeed WA can contribute to the realisation of IWRM.

Just How Much Bigger is Government in Canada? A Comparative Analysis of the Size and Structure of the Public Sectors in Canada and the United States, 1929-2004

We compare the size, structure and evolution of the public sectors in Canada and the United States primarily using national income accounting data. In the course of this investigation, which is accompanied by a substantial spreadsheet covering the period from 1929 to 2003/2004, questions are raised about the appropriate definition of the public sector for comparative purposes. Using a definition that consistently includes nonprofit universities and hospitals in both countries, the data illustrate, first, that there is a surprising degree of conformity in the level and rate of change of the expenditure size of government (relative to GDP) between the U.S. and Canada over a long period, as well as in some aspects of expenditure structure such as transfers to persons. Second, the comparative perspective highlights differences during the Great Depression, the immediate post WWII period, and what we call 'the bulge' in consolidated Canadian spending relative to the U.S. in the period between 1960 and 2004 that peaked in 1992, a bulge that remains even after defense spending is netted out, suggesting that explanations of the evolution of differences over time across countries may be more meaningful than those that focus on permanent differences in size. Third, application of a newly constructed Fisher type government deflator for Canada indicates that real government spending relative to real aggregate income as of 2003 was virtually the same in the two countries, at about 27 percent of real GDP. The paper concludes with a number of provocative questions that arise in the course of our investigation.

National Income Accounts

This article presents a brief overview of the national income accounts. It summarizes the main parts of accounts and situates them within the efforts of economists to quantify economic activity and economic well-being. The author argues that these statistics are necessarily provisional and imperfect but nevertheless extremely useful. Some current directions for economic research seeking to extend the accounts are also discussed.

Economic openness and green GDP

Since the early 1990s there have been several attempts to develop national income accounting systems which recognize the negative impacts of environmental degradation and income inequalities on economic welfare. Collectively, these “green” gross domestic product (GDP) studies have generated a wealth of new time series data sets which can be used to reexamine the links between GDP and a host of factors commonly included in traditional economic growth models. In this paper, we develop models of green GDP growth and the gap between traditional and green GDP by using a panel data set from eight countries spanning 30–50 years. In both the growth and gap models, the effects of economic openness are tested. We find strong and robust results suggesting a negative nonlinear correlation between openness and green GDP growth and a positive nonlinear correlation between openness and growth of the gap between traditional and green GDP. While green GDP accounting systems are still in their infancy, our paper nonetheless implies that once these more comprehensive measures are fully developed, empirical models which explore factors contributing to the growth of economic welfare over time should be reexamined.

National environmental accounting: bridging the gap between ecology and economy

National environmental accounts -- Concepts of conventional national income accounting -- Structure of the conventional income accounts -- Overview of the revised SEEA -- Pollution accounting : the physical side -- Pollution accounting : what are we spending now? -- Pollution accounting : policy questions -- Resource accounting -- Forest accounts -- Subsoil asset accounts -- Fisheries, land, and water accounts -- Macroeconomic indicators in the SEEA -- Macroeconomic measures outside the SEEA.

Income, Wealth and Sustainable Welfare in Representative-Agent Economies

In a finite-horizon general equilibrium model national income is the value of output at supporting prices and a perturbation increases welfare if and only if it raises national income. National income therefore serves as both a welfare measure and a cost-benefit criterion. We construct a measure with these properties for an infinite horizon representative agent model (following suggestions by Fisher and by Samuelson), and relate it to a debate about how to measure welfare in a dynamic model, how to measure green national income, and how to measure sustainability. Our measure has all the right properties - it measures national income, provides an if and only if welfare increase criterion (thus integrating national income accounting and cost-benefit analysis), and acts as a good indicator of sustainability. It is observable and has been measured for a number of countries. Our index is a Fisherian wealth measure and our results represent the completion of a research agenda set out by Samuelson in 1961.

The World Bank's ‘genuine savings’ measure and sustainability

In order to consider the depletion of natural capital in national income accounting, the World Bank has developed a composite indicator known as ‘genuine savings’ incorporating several environmental indicators. This paper examines the conceptual and empirical characteristics and policy implications of the measure. Analysis shows that the measure is conceptually and empirically imperfect. The policy implications based on this measure are erroneous. The paper suggests that a global approach is needed to appropriately address sustainability issues and to incorporate natural capital in national accounting.

George Reisman on National Income Accounting

Abstract. George Reisman misrepresents macroeconomists’ estimation of national income. He fails to distinguish between intermediate goods and factors of production, and he does not correctly recognize macroeconomists’ derivation of the net domestic or national product. His concept of gross national product is also grossly mistaken. This note offers a correction for his confusion.

Data Watch The American Time Use Survey

We discuss the new American Time Use Survey (ATUS), an on-going household survey of roughly 1,200 Americans per month (1,800 per month in the first year, 2003) that collects time diaries as well as demographic interview information from respondents who had recently been in the Current Population Survey. The characteristics of the data are presented, as are caveats and concerns that one might have about them. A number of novel uses of the ATUS in economic research, including in the areas of macroeconomics, national income accounting, labor economics, and others, are proposed to illustrate the magnitude of this new survey's possible applications.