SNA 2008 in the US National Income and Product Accounts

Transcription

1 SNA 2008 in the US National Income and Product Accounts Brent Moulton The Accounts of Society Luxembourg June 2014

2 Overview In July 2013, BEA published a comprehensive revision of the national income and product accounts (NIPA) Implemented major changes from SNA 2008: Capitalization of R&D Capitalization of entertainment, literary, and artistic originals (from SNA 1993) Capitalization of military weapons systems (previously capitalized in NIPA) Accrual measures of pension entitlements Financial and insurance services Level of GDP for 2012 revised up 3.6% 2

3 Real gross domestic product [Percent change from preceding period] Percent Previously published Revised 3

4 Research and Development Expenditures on R&D have the characteristics of fixed assets and should be treated as capital formation: Ownership rights, long-lasting, used in production Previous treatment: Business R&D expenditures were classified as intermediate inputs R&D expenditures of nonprofit institutions and governments were included in consumption expenditures New treatment: R&D expenditures by businesses, NPISH, and governments are counted as investment (fixed capital formation) Depreciation of R&D added to consumption of fixed capital (CFC) 4

5 Impact of Capitalizing R&D Total R&D investment for 2012: $417.7 billion 2.6% of (revised) GDP Business R&D: $248.7 billion Formerly treated as intermediate spending Government & nonprofit R&D: $169.0 billion Reclassified from consumption to investment Impact on GDP revision for 2012: $396.7 billion 2.5% of (previously published) GDP Business investment added to GDP: $248.7 billion Government & nonprofit add CFC for R&D: $148.0 billion 5

6 Entertainment, Literary, and Artistic Originals Original films, sound recordings, manuscripts, etc., that can be used for the production and sale of copies Estimates for several types, including: Motion pictures Long-lasting television programs Books Music compositions and recordings Miscellaneous artwork Treatment as fixed investment similar to R&D, except entirely in private sector Added $74.3 billion or 0.5% to GDP for

7 Real private intellectual property products [Percent change from preceding period, SAAR] Private Investment in IPP [Percent Change from Previous Quarter] 15 Percent

8 Military weapons systems Under SNA 1993, general government final consumption expenditures But these systems (warships, military aircraft, tanks, etc.) are long-lasting assets that are used in the provision of defense services Consistent with the SNA criteria for fixed assets SNA 2008 recommends capitalizing these systems US NIPA have capitalized weapons since 1996 Excluded in US SNA-based data provided to OECD for purpose of international comparisons Now US NIPA GDP is consistent with OECD GDP Effect on GDP: $85.6 billion or 0.5% for

9 Pensions: SNA 2008 conceptual framework The 2008 SNA recognizes that employment-related pension entitlements are contractual engagements, that are expected or likely to be enforceable. They should be recognized as liabilities towards households, irrespectively of whether the necessary assets exist in segregated schemes or not. (A3.127) The employer s contribution and the liability of the pension fund to the employee are based on actuarial calculations of the net present value of future benefits. Any excess of the liabilities of the pension fund over the available assets may represent a claim on the sponsor. 9

10 Employment-based pensions in the US In private industry, defined-benefit plans are in decline 49% of private workers participate in a pension plan Only 16% participate in a defined-benefit plan Regulated by federal government Growing use of defined-contribution plans Public-sector plans state & local government 85% of workers participate in a retirement plan 78% in a defined-benefit plan Federal government Military and civilian plans cover almost all workers Funds hold only special Treasury securities 10

11 SNA 2008 compensation of employees Defined-benefit plan promises to pay future benefits according to a formula based on level of pay and time in service Pension component of compensation of employees is based on future benefits accrued through service Claims to benefits accrued through service (or normal cost ) Add service charge (for expenses of administering fund) and subtract employees actual contributions to get total employers pension contributions Employers imputed pension contributions Subtract employers actual pension contributions from total employers pension contributions 11

12 SNA 2008 claim of pension fund on pension sponsor If pension plan sponsor (usually the employer) is responsible for meeting the liabilities of the pension fund in case of any shortfall: Any excess of pension entitlements over assets held by fund is a liability of the sponsor and asset of the pension fund Any excess of assets over pension entitlements is an asset of the sponsor and liability of the pension fund Net worth of the pension fund exactly zero at all times 12

13 Results for United States Estimates prepared jointly by BEA, Federal Reserve In 2012, employers imputed pension contributions about 0.4% of GDP Negative for private and federal government plans Positive for state & local government Imputed property income on plans claims on sponsors 0.1% of GDP for private plans in % for state & local government 0.6% for federal government Claims on sponsors (unfunded pension entitlements) 2.7% of GDP for private plans in % for state & local government 11.0% for federal government 13

14 Shares of US DB plans funded by assets 14

15 Financial services Banks and other financial intermediaries provide services that are not explicitly invoiced Financial intermediation services indirectly measured (FISIM) Under SNA 2008, FISIM calculated by comparing interest rates charged on loans and paid on deposits to a reference interest rate Issue should FISIM include the portion of interest charged to cover the loan losses that are expected due to defaults? BEA has decided to exclude these amounts from the value attributed to the provision of financial services 15

16 Non-life insurance services Under SNA 1993, non-life insurance services were measured indirectly based on premiums minus claims Led to unusual volatility when large catastrophes occurred, for example: 2001 terrorist attacks on World Trade Center and Pentagon 2005 Hurricane Katrina SNA 2008 eliminates this volatility by using a more stable measure of adjusted claims Large catastrophic claims classified as capital transfers New methods were adopted by BEA in 2003 and

17 Future work SNA 2008 treats goods sent abroad for processing on the basis of change in ownership. Goods that cross customs boundary without a change in economic ownership would be trade in services rather than trade in goods BEA is still working developing the source data that will be required to implement this change BEA s accounts do not include estimates for illegal activities (such as production of drugs, prostitution) US GDP does include adjustments for source data on legal activities that are misreported or underreported SNA 2008 s new treatment of employee stock options not yet implemented in the US 17

18 Future work (continued) Work is also planned on several long-standing differences between the NIPA and the SNA Differences in sector accounts, such as the classification of non-corporate businesses Social transfers in kind Some inconsistencies in terminology and presentation 18