Download National Accounts - continuously struggling to catch

National Accounts - continuously
struggling to catch-up with
economic reality and policy needs
Jorgen Elmeskov, Statistics Denmark
Presentation at the conference on The Accounts
of Society, Luxembourg, 12-13 June
A time for celebration
 ESA2010 introduction is a major achievement
 More generally, national accounts have been
tremendously successful

Including to underpin economic policies
 Such success can lead to hubris
 Hence, perhaps justified to look at some
weaknesses
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Behind the curve
 National accounts are meant to describe
continuously evolving economies
 But are slow-moving by construction

Recognition lag before change is noticed
 Takes time to change a coherent and integrated framework
 New methods may have to be introduced
 Takes time to change or collect new primary statistics
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Behind the curve
– globalisation as an example
 Some enterprises undertake all or most production
abroad
 They enter National Accounts mainly via earnings
from foreign affiliates
 National Accounts are not very informative for
analysis of policies that influence such enterprises
 Transborder internet activities are also a challenge
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Some challenges are long-standing
 Such as the price-volume split for market services

Affects productivity measurement
 ESA2010 has brought prominence to the pricevolume split for non-market services
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Price-volume split for public services
 Statistics Denmark was slow in moving away from
the input based method
 The move to ESA2010 raises a communications
issue wrt. fiscal policy discussion
 And a substantive issue of whether change is
sufficient?
 A further change down the line will raise a new
communications issue
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Fiscal rules meet redefined GDP
 Measured GDP is boosted by treating R&D as an
asset as well as by other adjustments
 At the same time, GDP is the denominator of many
ratios of interest to fiscal policy
 Actual and potential changes in the definition of GDP
raises questions:

Should fiscal rules be designed so as to be robust to
changes in the definition of GDP?
 Is GDP the right denominator in fiscal rules?
 Would an income concept be preferable?
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Where to draw the asset boundary?
 What about education, training, marketing and other
intrangibles?
 Based on criteria such as return, appropriability,
rivalry the boundary looks hazy
 Shifts in the boundary could lead us to re-write
economic history with impacts for policy (including
fiscal ratios if defined wrt. GDP)
 Hence, desirable to have clear criteria for what is in
and what is out
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Asset prices and valuation changes
 Some asset stocks do not fit into the core National
Accounts, though they may be important for policy
 For those that do fit in, there are questions on how to
account for valuation gains

Consistency between creditors and debtors?
 Consistency between income and asset stocks?
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Final words
 The introduction of ESA2010 is a major achievement
 But still plenty of unsettled issues
 Including some with an obvious policy angle
 Thank you for listening!
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