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On misusing National Accounts data for governance purposes

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Abstract

According to KENDRICK (1996, p. 1), National Accounts have become “an indispensable tool for macroeconomic analysis, projections, and policy formulation”. The paper elaborates on this statement, addressing policy domains that rely heavily on National Accounts data. Yet – useful as they are – National Accounts can also be misused in the context of governance. The most common misapplication of National Accounts relates to the field of international comparisons. For instance, according to National Accounts data, the U.S. have outperformed all other high-income economies over the course of the 90s and up through the new millennium. In many European countries, public debate centres on the question how to devise ‘structural reforms’ in order to make the set-up of the respective economy more similar to that of the United States. Arguably, the main impact of National Accounts on governance can be found here. Still, there are large differences in the ways National Accounts calculations are carried out even among European countries, let alone between Europe and the U.S. The paper discusses several such differences, showing that the divergence in growth rates between the U.S. and the EU since 1997 can be explained almost entirely in terms of differing statistical methods.

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Bibliographic Info

Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 05-101.

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Length: 25 pages
Date of creation: Mar 2005
Date of revision:
Handle: RePEc:kof:wpskof:05-101

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Keywords: National Accounts; governance; inflation and growth comparisons; deflation methods; statistical artefacts;

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References

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  1. Nadim Ahmad & François Lequiller & Pascal Marianna & Dirk Pilat & Paul Schreyer & Anita Wölfl, 2003. "Comparing Labour Productivity Growth in the OECD Area: The Role of Measurement," OECD Science, Technology and Industry Working Papers 2003/14, OECD Publishing.
  2. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
  3. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: US Economic Growth in the Information Age," OECD Economics Department Working Papers 261, OECD Publishing.
  4. Stefano Scarpetta & Andrea Bassanini & Dirk Pilat & Paul Schreyer, 2000. "Economic Growth in the OECD Area: Recent Trends at the Aggregate and Sectoral Level," OECD Economics Department Working Papers 248, OECD Publishing.
  5. G. Christian Ehemann & Brent R. Moulton, 2001. "Balancing the GDP Account," BEA Papers 0014, Bureau of Economic Analysis.
  6. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
  7. Mark A. Wynne & Diego Rodriguez-Palenzuela, 2002. "Measurement bias in the HICP: what do we know and what do we need to know?," Working Papers 0206, Federal Reserve Bank of Dallas.
  8. Jochen Hartwig, 2006. "Messprobleme bei der Ermittlung des Wachstums der Arbeitsproduktivitaet - dargestellt anhand eines Vergleichs der Schweiz mit den USA," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 226(4), pages 418-435, July.
  9. Jochen Hartwig & Bernd Schips, 2005. "Verzerrungen von Konsumentenpreisindices und ihr Einfluss auf das "reale" Wirtschaftswachstum- dargestellt am Beispiel der USA," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 225(4), pages 394-412, July.
  10. Robert J. Gordon, 2000. "The Boskin Commission Report and its Aftermath," NBER Working Papers 7759, National Bureau of Economic Research, Inc.
  11. Henning Ahnert & Geoff Kenny, 2004. "Quality adjustment of European price statistics and the role for hedonics," Occasional Paper Series 15, European Central Bank.
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Cited by:
  1. AfDB AfDB, . "Strategy for the Harmonization of Statistics in Africa," Global Strategy Implementation Bulletin, African Development Bank, number 370, 7.
  2. Jochen Hartwig, 2005. "Sind unsere gesamtwirtschaftlichen Probleme überhaupt lösbar?," KOF Working papers 05-112, KOF Swiss Economic Institute, ETH Zurich.

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