Transcript balanced IO framework

U.S. Quarterly GDP by Industry
Accounts: Methods and
Research Results
Brian C. Moyer
13th OECD-NBS Workshop on National Accounts
Haikou, China
November 30 – December 4, 2009
www.bea.gov
Motivation
 Higher frequency industry data for business
cycle and policy analysis
 New price and quantity measures in a NIPA
framework provide an industry breakout of
quarterly GDP growth
 Available shortly after the 3rd estimate of
quarterly GDP from the NIPAs
 New information to improve the NIPAs
www.bea.gov
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Why now?
 Framework established through recent
integration of BEA’s annual I-O and GDP by
industry accounts
 Combined best available source data using quality
weighting
 Provided consistent measures of output, inputs, and
value added by industry
 Accelerated availability of annual I-O accounts
 Higher-frequency source data now available
 Census Bureau’s quarterly surveys
 Bureau of Labor Statistics’ price indexes
www.bea.gov
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Overview of methods
 Benchmarked to the annual I-O and GDP by industry
accounts
 Extrapolations of nominal output and value added
based on:
 Receipts, shipments, and sales from the Census Bureau
 Income-by-Industry data from the NIPAs
 Wage and salary data from the BLS
 Estimates of final expenditures indirectly measured
using “commodity flow” method
 Based on ratios of domestic supply
 International trade data from the Census Bureau
 Inventory data from the NIPAs
 Statistics prepared in a balanced I-O framework
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Overview of methods
 Real value added based on double deflation, where
output and inputs are deflated separately
 Deflation of nominal output and inputs using:
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Producer price indexes
PCE implicit price deflators
International price indexes
Implicit price indexes based on industrial production
indexes
 Domestic and imported inputs deflated separately
 Aggregation using Fisher formulas, including
contributions to GDP price and quantity growth
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Research results
▪ Real value added for “All industries” tracks well
with real GDP
▪ Industry composition provides good indication
of:
 Direction of change
 Acceleration/Deceleration
 Growth relative to trend
▪ Results are sensitive to business cycle
fluctuations
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Real GDP for “All industries”
Chart 2. Percent Change From Preceding Period in Real GDP vs.
Real Value Added for All Industries
2003:IV-2007:IV
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7
6
5
4
3
2
1
0
-1
-2
-3
Real VA for All
Industries
Published NIPAs
03:IV
www.bea.gov
04:II
04:IV
05:II
05:IV
06:II
06:IV
07:II
07:IV
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Case study: Wholesale trade
Quarterly Trends for 2007
Percent
12
4
8
4
0
-4
3
-8
07Q1
2
Percent
07Q2
07Q3
07Q4
Real Value Added
Real sales for Merchant Wholesale trade
1
0
-1
-2
2005
www.bea.gov
2006
2007
2008
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