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Measuring the Nominal Value of Financial Services in the National Income Accounts


  • Fixler, Dennis
  • Zieschang, Kimberly D


The recent growth in the U.S. financial service sector has resurrected the controversy over the treatment of financial services in the national income accounts. The main points of contention are the treatment of interest payments and the valuation of "free" financial services provided by banks. To examine different treatments of financial services, the authors employ a financial firm model that links financial service prices to the user cost of money. They show that their approach subsumes both the Department of Commerce and the U.N. Statistical Office approaches and thereby provides a heretofore absent economic foundation for their methods. Copyright 1991 by Oxford University Press.

Suggested Citation

  • Fixler, Dennis & Zieschang, Kimberly D, 1991. "Measuring the Nominal Value of Financial Services in the National Income Accounts," Economic Inquiry, Western Economic Association International, vol. 29(1), pages 53-68, January.
  • Handle: RePEc:oup:ecinqu:v:29:y:1991:i:1:p:53-68

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    References listed on IDEAS

    1. William D. Nordhaus, 1980. "Policy Responses to the Productivity Slowdown," Cowles Foundation Discussion Papers 555, Cowles Foundation for Research in Economics, Yale University.
    2. Zvi Griliches, 1998. "Productivity Growth and R&D at the Business Level: Results from the PIMS Data Base," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 134-156 National Bureau of Economic Research, Inc.
    3. Minasian, Jora R, 1969. "Research and Development, Production Functions, and Rates of Return," American Economic Review, American Economic Association, vol. 59(2), pages 80-85, May.
    4. Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 17-45 National Bureau of Economic Research, Inc.
    5. Link, Albert N, 1981. "Basic Research and Productivity Increase in Manufacturing: Additional Evidence," American Economic Review, American Economic Association, vol. 71(5), pages 1111-1112, December.
    6. Wesley M. Cohen & Richard C. Levin & David C. Mowery, 1987. "Firm Size and R&D Intensity: A Re-Examination," NBER Working Papers 2205, National Bureau of Economic Research, Inc.
    7. Stern, Robert M & Baum, Christopher F & Greene, Mark N, 1979. "Evidence on Structural Change in the Demand for Aggregate U.S. Imports and Exports," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 179-192, February.
    8. Mansfield, Edwin, 1980. "Basic Research and Productivity Increase in Manufacturing," American Economic Review, American Economic Association, vol. 70(5), pages 863-873, December.
    9. Cohen, Wesley M & Levin, Richard C & Mowery, David C, 1987. "Firm Size and R&D Intensity: A Re-examination," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 543-565, June.
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    Cited by:

    1. Dennis Fixler, 2014. "Priorities and Directions for Future Productivity Research: A BEA Perspective," International Productivity Monitor, Centre for the Study of Living Standards, vol. 27, pages 10-13, Fall.
    2. repec:dgr:rugggd:gd-125 is not listed on IDEAS
    3. Dennis Fixler & Kim Zieschang, 2016. "Producing Liquidity," CEPA Working Papers Series WP022016, School of Economics, University of Queensland, Australia.
    4. Allen N. Berger & David B. Humphrey, 1992. "Measurement and Efficiency Issues in Commercial Banking," NBER Chapters,in: Output Measurement in the Service Sectors, pages 245-300 National Bureau of Economic Research, Inc.
    5. Gabriel Asaftei & Subal Kumbhakar, 2008. "Regulation and efficiency in transition: the case of Romanian banks," Journal of Regulatory Economics, Springer, vol. 33(3), pages 253-282, June.
    6. J. Christina Wang, 2003. "Loanable funds, risk, and bank service output," Working Papers 03-4, Federal Reserve Bank of Boston.
    7. Harchaoui, Tarek M., 2012. "A Quarter of a Century Progress Report on the Services Sector Productivity Statistics. A Europe-United States Perspective," GGDC Research Memorandum GD-125, Groningen Growth and Development Centre, University of Groningen.
    8. Jayasinghe, Milan, 2005. "On the Mechanics of Measuring the Production of Financial Institutions," MPRA Paper 7694, University Library of Munich, Germany.
    9. Diewert, Erwin & Fixler, Dennis & Zieschang, Kimberly, 2012. "Problems with the Measurement of Banking Services in a National Accounting Framework," Economics working papers erwin_diewert-2012-14, Vancouver School of Economics, revised 04 Apr 2012.
    10. W. Erwin Diewert, 1995. "Price and Volume Measures in the System of National Accounts," NBER Working Papers 5103, National Bureau of Economic Research, Inc.
    11. E.P. Davis & Sinikka Salo, 1998. "Excess Capacity in EU and US Banking Sectors - Conceptual, Measurement and Policy Issues," FMG Special Papers sp105, Financial Markets Group.
    12. Diewert, Erwin, 2007. "Measuring Productivity in the System of National Accounts," Economics working papers diewert-07-11-16-12-39-23, Vancouver School of Economics, revised 16 Nov 2007.
    13. Abdelaziz Rouabah & Paolo Guarda, 2007. "Banking output & price indicators from quarterly reporting data," BCL working papers 27, Central Bank of Luxembourg.
    14. Kimberly D. Zieschang, 2016. "FISIM Accounting," CEPA Working Papers Series WP012016, School of Economics, University of Queensland, Australia.
    15. Joseph G. Haubrich, 1991. "Financial efficiency and aggregate fluctuations: an exploration," Economic Review, Federal Reserve Bank of Cleveland, issue Q IV, pages 25-36.
    16. Rolf Färe & Kimberly Zieschang, 1991. "Determining output shadow prices for a cost-constrained technology," Journal of Economics, Springer, vol. 54(2), pages 143-155, June.

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