Transcript PowerPoint - IARIW.org

BRIDGING I TO A
IARIW-OECD Conference “W(h)ither the SNA”
on the Future of National Accounts
Paris, April 16-17, 2015
Peter van de Ven
Head of National Accounts, OECD
An expression of love and admiration
National Accounts
She is beautiful,
she is elegant,
she is …
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Introduction
• Looking back over a period of 30 years
• Main developments having a potential impact on the
System of National Accounts:
– Input
– Throughput
– Output and user demands
• How to move forward?
3
Looking back
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Looking back: a lot has changed!
• Timeliness and periodicity:
– 1985: Only annual estimates, 6-7 months after the end of the
reference year
– 2015: Quarterly estimates have become dominant, released
30-90 days after the end of the reference quarter
• Scope of the system in practice:
– 1985: Mainly focused on the production of goods and services,
with some marginal data on income and finance
– 2015: Full-fledged system of national accounts, including
institutional sector accounts, up to and including balance sheets
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Looking back: a lot has changed!
• Compilation process:
– 1985: A lot of manual interventions
– 2015: More and more automated, although manual interventions
are still needed
• Administrative use of national accounts data:
– 1985: ???
– 2015: Sometimes, one gets the feeling that it completely governs
the life of a national accountant in the EU
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Main developments having a
potential impact on the System of
National Accounts
7
Present and future changes in input
• Continuing pressure on decreasing respondent burden
– Less surveys, but then again …
– … how good are survey data actually?
• More use of administrative records
– Public records are nowadays more and more available, increasing
knowledge on how to process them efficiently
– Much more granularity, more complete, and better defined
(although not always fully consistent with NA-definitions)
• Big Data:
– Internet scraping???
– Use of private records very promising, but how to get access to
them …
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Changes in throughput
• ICT-capabilities have changed tremendously, and will
continue to improve
• Increasing possibilities to process vast amounts of data
• Much more attention for process design of statistics,
potentially enabling to have more transparent linkages
between macro-data and underlying micro-data
• Providing potential for flexibility to meet user demands
and for efficiency gains
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Output and user demands
Changes in economic developments and related user
demands:
• Changes related to the “economic core”:
– Globalisation
– Knowledge economy
– From production to income and wealth
– Distribution of income, consumption and wealth
• Going beyond the core system
– Well-being versus GDP
– Sustainability
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1. Globalisation
Significant share of domestic value added is generated by foreign
affiliates:
Value Added of Foreign Affiliates – share of national total 2009 (ISIC B-N, ex K)
60%
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
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1. Globalisation
• Continuing international fragmentation of production
processes, and outsourcing more generally
• Allocation of value added and profits mainly driven by
minimisation of global tax burden through:
– Transfer pricing
– Channelling funds through SPEs
– Optimisation of recording economic ownership and use of IPPs
– Allocation of costs related to corporate services more generally
• Economic rationale, but it hampers analysis and policy
from an economic substance point of view, certainly when
it comes to national parts of MNEs
• Growing and quickly changing complexity of
arrangements adds to complexity of compiling statistics
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1. Globalisation
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1. Globalisation
• Need to link various statistics on MNEs at individual level,
also to support analysis
• Need for international exchange of (individual) data
• Need to distinguish foreign controlled enterprises from
nationally operating enterprises, also in supply and use
tables
• Need to link data on production process with data on
income and finance => single statistical unit?
• Need to have additional analysis, e.g. OECD Trade in
Value Added (TiVA), looking at Value Added content of
trade flows, instead of analysing gross cross-border flows
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2. Knowledge economy
• Knowledge including human capital considered as the
driving force of economic growth
• SNA made great progress in capturing knowledge capital:
– SNA 1993: mineral exploration, software and databases,
entertainment, literary and artistic originals
– SNA 2008: research and development
• Should we make further steps?
– “Information” more broadly
– Organisational capital
– Brands, trademarks, logos, domain names
– Human capital
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2. Knowledge economy
Why not further extend the asset boundary?
• Further drifting away from business accounting standards =>
negative consequences for potential micro-macro linkage?
• Distinction between current and investment-type of expenditures
requires highly subjective assumptions
• Fully integrating human capital into the SNA would provide a
completely different picture of the economy, which users may find
difficult to relate to
• Quick wins possible without changing the asset boundary, thus
providing a basis for further analysis:
– Labour input by level of education
– More targeted classification of goods and services (e.g. education type of
expenditures, expenditures on advertising, training, organisational changes, etc.)
• Would it add to analysing e.g. multifactor productivity?
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3. From production to income/wealth
Attention for income and wealth issues has grown fast:
• Well-being perspective: differences between economic
growth and real household disposable income
• Analysis of interaction between “non-financial” economy
and the “financial” economy, e.g. impact of wealth
changes (holding gains/losses) on consumption and
growth
• Economic and financial crisis: analysis of risks and
vulnerabilities related to interconnectedness, asset price
volatilities, growing debt levels, etc. => G20 Data Gaps
Initiative
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3. From production to income/wealth
• What can/should be done?
– Compile and publish full-fledged institutional sector accounts, up
to and including balance sheets, on a quarterly basis
– Main gaps:
• Good and internationally comparable data on non-financial
assets
• From-whom-to-whom information
– Some types of user demands, e.g. related to risk analysis,
require very granular data
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4. Distributional aspects
“Every American should have above
average income, and my Administration is
going to see they get it.” (an American
president on campaign trail)
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4. Distributional aspects
• Sub-classifications per main sector in SNA 2008
– Non-financial corporations:
11
– Financial corporations:
96
– General government:
15
– Households:
7
– NPISHs:
2
• More attention needed for people
• Need to integrate micro-data on households, to arrive at
consistent distributional information
– In supply and use tables: more details on labour input
– In sector accounts: more details on households (e.g., by income
quintile/decile, by type of income, by composition of households)
=> OECD Expert Group DNA
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5. Well-being versus GDP
• Well-being is a multidimensional phenomenon
• Example of OECD Better Life Index, consisting of 11
dimensions: housing, income, jobs, education, civic
engagement, health, life satisfaction, safety, work-life
balance, etc.
• To get all of this into one consistent (monetary)
accounting framework, thus arriving at one single
measure, is, in my opinion, a mission impossible
• This does not preclude complementary research in trying
to create a well-being function, with shadow pricing
techniques, leading to one aggregate number
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5. Well-being versus GDP
• Accept that GDP is first and foremost an indicator of
income or economic activity, which may actually be
instrumental to the greater good of well-being
• Need to establish a much better link between national
accounts and the work on well-being, via satellite
accounts and micro-macro linkages
• Such a system will provide an improved information basis
for analysing trade-offs and win-wins between various
aspect of well-being
• But … it’s a long-term objective, … which will however
also be instrumental to enhancing well-being functions
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6. Sustainability
• Present SNA deals poorly with issues related to
environmental sustainability
• Endorsement of SEEA Central Framework is a major step
forward
• Now, one should focus on the implementation of these
SEEA satellite-type of tables
• Further work needed on ecosystems accounting
• In future, potential for development of physical and
monetary estimates for capital stocks and depletion /
degradation of natural resources and possibly
ecosystems
• Main conceptual problem related to “ownership”
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Moving forward
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How to move forward?
Main trends relevant for the future:
• More and changing demands requiring granular data:
distribution, well-being, measurement of risks and
vulnerabilities, globalisation, etc.
• Need to combine analysis of production process with
income and wealth
• Quickly evolving products and technologies, including
less homogenous, quickly changing production
arrangements
• Availability of granular data and the ability to process
them
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How to move forward?
How to cope with this changing environment?
• Don’t make the system overly complicated: stay, for
example, close to business accounting standards
• Simplify the system by using one statistical unit for supply
and use tables and for institutional sector accounts:
enterprise (input-output tables are in the end a statistical
construct)
• Develop and implement a more transparent process
design for statistics, from business registers to NA:
– More flexibility to adapt to user demands
– Enhanced possibilities for users to link micro (individual, I) to
macro (aggregate, A) => Bridging I to A
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How to move forward?
How to cope with this changing environment?
• In some cases, further extend the core system, for
example by having more detailed distributional
information for households
• GDP = GDP; Well-being = Well-being; GDP ≠ Well-being
• Establish a link between the “economy” and well-being,
making possible the analysis of trade-offs between
various aspects of well-being, through the development of
satellite type of accounts showing more details on e.g. the
outputs of health, education, etc.
• In the area of sustainability, SEEA is an excellent
example!
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Concluding remarks
• Not everything that is valuable can be valued, and not
everything that can be valued is valuable (paraphrase of
Einstein?)
• It’s all about people, it’s not only about the economy,
stupid! (paraphrase of Clinton?)
• Not everything can be solved by economic rationale
• Need to bridge I to A
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Thank you for your attention!
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