Understanding National Accounts SECOND EDITION Frangois Lequiller, Derek Blades OECD BETTER POLICES FOR BETTER LIVES
Table of contents Acknowledgements 11 Chapter 1. The essential macroeconomic aggregates 13 1. DefiningGDP 15 2. The first fundamental equation: Deriving GDP in volume 21 3. Defining demand: the role of Investment and consumption 24 4. Second fundamental equation: Reconciling global Output and demand 26 5. Third fundamental equation: Reconciling global Output and income 30 Key points 36 Going further 37 Exercises 44 Chapter 2. Distinguishing between volume and price increases 47 1. A word of caution: Compare volumes 48 2. The volume/price breakdown applied to changes over time 50 3. The difficulties of aggregation 51 4. Volume indices and price indices 55 5. Constant prices 57 6. "Chained" accounts and the loss of additivity 58 7. Unpleasant practical consequences of chain linking 61 8. The special cases 63 9. And what about the price indices? 66 Key points 69 Going further 70 Exercises 72 Chapter 3. International comparisons 79 1. Comparison of growth rates 80 2. Comparison of ratios: The example of the saving ratio, the profit rate and the public debt ratio 83 3. Comparison oflevels of variables: GDP per head in volume 87 4. The spatial volume/price breakdown: Purchasing power parities... 89 5. Comparison of variables in absolute terms: Household consumption 96 UNDERSTANDING NATIONAL ACCOUNTS OECD 2014 g
Key points 100 Exercises 101 Chapter 4. Production: What it includes and excludes 103 1. The production frontier 106 2. The illegal economy and the underground economy 109 3. Measurement of Output and of value added: The general case... 110 4. The measurement of Output and of value added: Special cases.. 113 5. Nomenclatures and classifications 117 Key points 120 Going further 121 Exercises 126 Chapter 5. Defining final uses of GDP 129 1. Final uses in the national accounts 131 2. Households' final consumption expenditure 134 3. Final consumption expenditure by general govemment 138 4. Final consumption expenditure of the NPISHs 141 5. Moving from consumption expenditure to actual consumption. 142 6. Gross fixed capital formation 143 7. Changes in inventories 148 8. Net acquisitions of valuables 151 9. Exports and imports of goods and services 151 Key points 158 Going further 160 Exercises 165 Chapter 6. The household account 169 1. The three key indicators in the household account 171 2. The household sector accounts 173 3. An alternative way to measure household disposable income and consumption 186 Key points 189 Going further 190 Exercises 197 Chapter 7. Business accounts 201 1. The relationship between the firm (enterprise) and the corporation. 204 2. The structure of corporate-sector accounts 205 3. From corporations to firms 215 Key points 219 Going further 220 Exercises 225 6 UNDERSTANDING NATIONAL ACCOUNTS O OECD 2014
Chapter 8. The financial and balance sheet accounts 231 1. The importance of household wealth for the analysis of the current economic Situation 232 2. The principle of quadruple-entry bookkeeping 234 3. Financial assets and liabilities 239 4. The link between financial flows and financial stocks 245 5. The non-financial assets 249 6. The balance sheet accounts 251 7. The complete sequence of accounts of an institutional sector... 252 Key points 255 Going further 257 Exercises 271 Chapter 9. The general govemment account 275 1. A simplified diagram for general govemment 278 2. Detailed structure of the general govemment account 281 3. What is the scope of the general govemment? 288 4. The principal public-finance indicators 292 Key points 295 Going further 296 Exercises 300 Chapter 10. The input-output table and integrated economic accounts.. 305 1. The supply-and-use tables (SUTs) 307 2. The aggregate supply and final uses tables 313 3. Intermediate use table (IUT) 316 4. The input-output table 318 5. The use of the input-output table for economic analysis 319 6. From the sum of the values added to GDP 321 7. The integrated economic account (IEA) 324 8. The transition from GDP to national income 327 Key points 330 Going further 331 Exercises 341 Chapter 11. The national accounts machinery: Compilation and reporting. 349 1. The quarterly national accounts 350 2. The annual national accounts 356 3. The revisions to the national accounts and their precision 358 4. Comprehensive revisions 361 5. Other datasets related to the national accounts 363 UNDERSTANDING NATIONAL ACCOUNTS OECD 2014 7
Key points 365 Going further 366 Exercises 369 Chapter 12. The national income and product accounts of the United States 371 1. Background 373 2. NIPA Tables 375 3. Dissemination of NIPAs 382 4. Other NIPA-related programmes 384 5. Compilation of quarterly gross domestic product 387 6. Methodologies for preparing quarterly GDP 391 Going further 402 Chapter 13. The 2007-2009 financial crisis and recession: Reflections in the national accounts 409 1. The Great Recession 412 2. Slow economic recovery 427 3. Prelude to the financial crisis 429 Chapter 14. International systems of national accounts: Past and future 437 1. From the very beginnings 438 2....to the first modern accounts 438 3. The 1953 SNA 439 4. The 1968 SNA 440 5. The 1993 SNA 442 6. The 1995 ESA 445 7. The 2008 SNA 445 Chapter 15. GDP as a welfare metric: The "beyond GDP" agenda 451 1. Better welfare measures within the national accounts 456 2. Welfare measures beyond the national accounts 463 3. Measuring well-being: the broader agenda on "Beyond GDP" 470 Chapter 16. National accounts in a globalising world 479 1. Evidence of increasing globalisation 482 2. A new Statistical tool to measure the impact of globalisation: Trade in Value Added (TiVA) 485 3. Continuing to compile good national accounts in a globalising world 492 Index 497 Glossary 501 8 UNDERSTANDING NATIONAL ACCOUNTS OECD 2014