Benchmark Input-Output Accounts

Benchmark Input-Output Accounts

Mary L. Streitwieser, Stas Rzeznik, and Nicholas EmpeyIndustry Benchmark DivisionIndustry Accounts Users’ ConferenceOctober 26, 2007

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Benchmark I-O Accounts

Products and uses Changes and improvements in the

2002 accounts Future products Q&A

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Benchmark I-O Accounts

Benchmark I-O accounts Based largely on Census Bureau data Prepared every five years

2002 released in September 2007 October SURVEY OF CURRENT BUSINESS -

BEA web site (www.BEA.gov): under Publications click on Survey of Current Business

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Benchmark I-O Tables

Make and Use tables Requirements tables Bridge tables Import matrix and concordance

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Internal Uses of Benchmark I-O Accounts

Benchmark Input-Output (I-O) Accounts

National Income and Product Accounts

-- Sets the level of PCE and PFI in the benchmark year by establishing the split of gross output between final purchases and intermediate inputs. -- Distributes final purchases across major GDP components.

Fixed Assets Accounts

-- Adjusts data from capital flow table, which is derived from the benchmark I-O accounts, mainly from a use-basis to an ownership-basis -- Benchmarks investment by type and industry based on the adjusted capital flow table -- Derives the net stocks of fixed assets from the resulting investment estimates

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Internal Uses of Benchmark I-O Accounts, cont.

Benchmark Input-Output (I-O) Accounts

Annual Industry Accounts

-- Adjusts benchmark I-O data to maintain consistency with the NIPAs - Helps determine how major final demand categories are distributed across commodities -- Helps determine how intermediate inputs are distributed across commodities

Regional Input-Output Modeling System (RIMS II)

--Uses producer portion of benchmark I-O to create region-specific production patterns as input to RIMS II - Uses value added and PCE, adjusted for regional earnings and consumption, to estimate the household row and column for RIMS II

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External Uses of Benchmark I-O Accounts

Other Federal agencies BLS ITC

Market analysis Impact analysis

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Sources of Improvement

NIPA Comprehensive Revision

Staff Research

NAICS changes

Expanded Source Data

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Government as Producer

Construc-tion

Manufac-turing

TradeInform-ation

ServicesTotal Inter-

mediatePCE PES

Net Exports

Govern-ment

Consump-tion

Govern-ment Final

Total Final Uses

Construction

Manufacturing

Trade

Information

Services

Government

Total Intermed

Wages

TOPI

GOS

Total

Total Commodity

Output

Industries (Intermediate Uses) Final Uses (GDP)

Comm-odities

Value Added

Total Industry Output

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Tribal Governments

Indian Nations’ activities are now shown in the Government industry

Cons-truction

Manufac-turing

TradeInform-ation

ServicesGovern-

ment incl. Indian

Total Inter-mediate

PCE PFINet

ExportsGovern-ment

Total Final Uses

Construction

Manufacturing

Trade

Information

Services

Government

Total Intermed

Wages

TOPI

GOS

Total

Total Com-

modity Output

Comm-odities

Value Added

Total Industry Output

Industries (Intermediate Uses) Final Uses (GDP)

Gaming

Cigarettes

Gaming

Cigarettes

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Bank Services

Recognized the implicit services of commercial banks to borrowers and depositors

Services to Borrowers Record keeping Intermediation Provision of credit

Services to Depositors Record keeping Clearing checks Security

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Insurance Premiums

Prior Treatment

Insurance Output = (Premiums) - (Claims)

New Treatment

Insurance Output = (Premiums) + (Premium Supplements) - (Expected Claims)

Premium Supplement

Premiums Paid

Premiums Paid

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TOPI and GOS

Taxes on Production and Imports less subsidies (TOPI) replaces Indirect Business Taxes (IBT)

Gross Operating Surplus (GOS) replaces Other Value Added (OVA)

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Other Improvements

Royalties Output

Personal Consumption Air transportation Food away from home Telecommunications

Expanded Source Data Total expenses data Information sector

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Methodological Improvement

BEA Integration Initiative requires reconciliation of Industry Value Added estimates in Benchmark Input-Output and GDP-by-Industry accounts

Benchmark estimates are expenditure-based

GDP-by-Industry estimates are income-based

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Structure of the Use Table

Cons-truction

Manufac-turing

TradeInform-ation

ServicesGovern-

ment incl. Indian

Total Inter-mediate

PCE PFINet

ExportsGovern-

ment

Total Final Uses

Construction

Manufacturing

Trade

Information

Services

Government

Total Intermed

Wages

TOPI

GOS

Total

Total Com-modity Output

Comm-odities

Value Added

Total Industry Output

Industries (Intermediate Uses) Final Uses (GDP)

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The Model

Min S {z, v} = z – intermediate inputs v – value-added w – reliability weights i – industries k – commodities h – value-added components

Constrained minimization model Constraints are specified to satisfy a

balanced input-output framework

i hvhi

hihi

i kzki

kiki

w

vv

w

zz2

,

0,,

2

,

0,, )()(

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The Model

Subject to: Sum (Intermediate estimates) + Sum

(Value Added) = Industry Gross Output

Sum (Intermediate estimates) + Sum (Final Uses) = Commodity Gross Output

Sum (Value Added) = GDP

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The Model

Fixed elements Final use categories Industry and commodity gross output Compensation Taxes

Variable elements Gross Operating Surplus (GOS) Intermediate inputs

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Comparing Reconciled GOS to Initial Benchmark GOS and Initial GDP-by-Industry GOS(Note: Industries are randomly sorted and values are scaled.)

0

500

1000

1500

2000

2500

A B C D E

Industry

Bil

lio

ns

of

Do

llar

s

GDP-By-Industry BenchmarkReconciled GOS

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Advantages of the new method

Transparent

Firm statistical foundation

Flexible

Replicable

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Where to Find Benchmark I-O Data and Information

BEA web site (www.BEA.gov): Under Industry click on Benchmark

Input-Output Accounts Benchmark I-O tables from 1947 to 2002 Interactive tables: 1987 to 2002 “Concepts and Methods of the U.S.

Input-Output Accounts” – In Publications box, click on Papers and Working Papers; click on BEA working papers, scroll down to 2006

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Future Data Products

Summer 2008: 2002 Capital Flow Table Fall 2008: 2002 Detail Methodology Fall 2009: 2002 Revised Benchmark I-O

Accounts Fall 2010: 2007 Preliminary Gross

Output and Proposed Classification

Framework Fall 2012: 2007 Benchmark I-O Accounts

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Contact Information

Email contact: [email protected]@[email protected] [email protected]

Telephone contact:202-606-5585