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When Numbers Don't Add Up: The Statistical Discrepancy in GDP Accounts

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  • Dean Baker

Abstract

At the peak of both the stock and housing bubbles, there were extraordinary shifts in the statistical discrepancy between the national output and income accounts. The statistical discrepancy fell from its normal range of 0.5 – 1.0 percent of GDP to levels below -1.0 percent of GDP. The analysis in this paper suggests that this reversal was directly related to these bubbles, with the likely explanation that a portion of the capital gains from these bubbles being misclassified in national income accounts as ordinary income. If this is the case, then the drops in household saving during the bubbles and the subsequent rises following their collapse were even larger than the official data show.

Suggested Citation

  • Dean Baker, 2011. "When Numbers Don't Add Up: The Statistical Discrepancy in GDP Accounts," CEPR Reports and Issue Briefs 2011-17, Center for Economic and Policy Research (CEPR).
    • Handle: RePEc:epo:papers:2011-17
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    File URL: http://www.cepr.net/documents/publications/gdp-2011-08.pdf
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    Cited by:

    1. Rishabh Kumar, 2015. "Savings from top incomes and accumulation in the United States context: Results from disaggregated national accounts," Working Papers 1524, New School for Social Research, Department of Economics.
    2. Dean Baker, 2012. "The Necessity of a Lower Dollar and the Route There," CEPR Reports and Issue Briefs 2012-04, Center for Economic and Policy Research (CEPR).

    More about this item

    Keywords

    GDP; savings rate; income accounts; capital gains;
    All these keywords.

    JEL classification:

    • E - Macroeconomics and Monetary Economics
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H - Public Economics
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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