When Numbers Don't Add Up: The Statistical Discrepancy in GDP Accounts
AbstractAt 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.
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Bibliographic InfoPaper provided by Center for Economic and Policy Research (CEPR) in its series CEPR Reports and Issue Briefs with number 2011-17.
Length: 11 pages
Date of creation: Aug 2011
Date of revision:
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GDP; savings rate; income accounts; capital gains;
Find related papers by JEL classification:
- E - Macroeconomics and Monetary Economics
- E2 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment
- E20 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- H - Public Economics
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-08-29 (Accounting & Auditing)
- NEP-ALL-2011-08-29 (All new papers)
- NEP-MAC-2011-08-29 (Macroeconomics)
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