www.bea.gov KLEMS and the NIPAs J. Steven Landefeld, Director World KLEMS Conference Harvard University August 20 th , 2010
Mar 27, 2015
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KLEMS and the NIPAs
J. Steven Landefeld, DirectorWorld KLEMS Conference
Harvard University
August 20th, 2010
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Integration: the foundation for KLEMS work
▪ Provide a complete set of accounts for the total economy and various sectors
▪ Ensure consistency in macroeconomic data used in the accounts
▪ Integrated statistics allow users to focus on analysis rather than making adjustments to the data
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Importance of consistent data by Industry
Differences in Growth Rates of Real Value Added, 2007
NOTE: Measures of value added were allowed to increase (decrease) by the difference in wage data between BLSand the Census Bureau.
0
5
10
15
20
25
30
Motor Vehicles Computers Manufacturing Durable Goods
Published Simulated
[Percent]
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Importance of consistent data on Income
-80%
-60%
-40%
-20%
0%
20%
40%
60%
1999 2000 2001 2002 2003 2004 2005 2006 2007
Y/Y
Pe
rce
nt
Ch
an
ge
S&P Operating Earnings SOI (Total Receipts less Total Deductions)
QFR Profits (Mining,MFG,Trade)
Percent Change of Profit Measures
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Integrated and Expanded Accounts
▪ Integrated accounts would include: More complete reconciliation and
balancing of the components of the U.S. accounts produced jointly by BEA, BLS, and the FRB Common concepts
Business sector, non-farm business, etc. Common methods
Seasonal adjustment, extrapolation and interpolation
Common source data Accuracy and consistency vs. historical practice
Common, and or, reconciled business registers and classifications
Expanded data sharing authority
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Integrated and Expanded Accounts
▪ Integrated accounts would include: A complete production account, based on:
Integration of NIPA’s and MFP accounts, with real and nominal values
Addition of estimates of capital services for government and nonprofits.
Longer-term: development of output based measures of government and non-profit product.
A complete integration of real and financial accounts, based on: Integration of BEA’s NIPA, Wealth, Balance of
Payments, Industry, and Regional data with the Fed’s Flow of Funds and Balance Sheet Estimates
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Integrated and Expanded Accounts
▪Integrated accounts would include:
R&D, Natural Resources, and Human Capital
Energy-EnvironmentHealth Care, Household Production, and
Pensions
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Current work & future plans on integration efforts
▪ Existing Integration Work: Better integration of BEA Industry and
GDP Accounts; quarterly GDP by industry Quarterly Final Expenditures, Income, and
Production-based estimates
FRB-BEA Annual and Quarterly Estimates: http://www.bea.gov/national/nipaweb/Ni_FedBeaSna
BLS-BEA Annual GDP-MFP Estimates: http://www.bea.gov/national/integrated_prod.htm
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Integrated Production Account
▪ GDP for government and nonprofits is now measured as compensation plus depreciation (capital consumption allowances)
▪ More complete measure of the cost or value of capital services would be rental value: Rental Value = rNS + Dep – Expected Capital
Gain or Loss Picking an appropriate rate of return is difficult
(private business sector IRR used below) SNA recommended supplemental item
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Integrated Production Account
▪ Other adjustments, including Private sector labor and capital inputs, Government labor inputs (adjusted for
labor composition) ▪ Such an integrated system would
enable users to identify the sources of changes in productivity and cross-walk them to GDP and its components: Product Industry Type of income/value-added Gross Output Final sales Intermediate products
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International Integration:
▪ Closing the gap on international inconsistencies: FISIM treatment Valuations in factor, basic, producer prices
used in value added Measuring depreciation Business accounting standards (IFRS vs.
GAAP for R&D) Seasonal adjustment practices Software: accounting & prices Common business registers
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Variation in software prices
Investment in software. Price indices in recent years. 1995=100
50
60
70
80
90
100
110
120
130
140
1992 1993 1994 1995 1996 1997 1998 1999 2000
SWE
GRC
FIN
SPA
ITA
NDL*
FRA
USA *
CAN *
DEN
AUS
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Variation in capitalized services
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Benefits of International Integration:
▪ Value of consistent macro estimates for coordinated fiscal, monetary, trade, regulatory and tax policies: EU KLEMS: SNA 2008 IMF Balance of Payments Manual EU Price Manual UN Guidelines on Integrated Economic
Statistics