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The Treatment of Financial Transactions in the SNA: A User Cost Approach

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  • Diewert, Erwin

Abstract

The paper considers some of the problems associated with the indirectly measured components of financial service outputs in the System of National Accounts (SNA), termed FISIM (Financial Intermediation Services Indirectly Measured). The paper considers how to integrate financial transactions into the balance sheet and production accounts of a firm; i.e., the paper looks at FISIM more broadly. In order to minimize the role of imputations, the paper considers a firm that raises capital at the beginning of the accounting period, engages in some form of productive activity during the period and then distributes the initial capital and any profits back to the capitalists who financed the firm.

Suggested Citation

  • , & Diewert, Erwin, 2014. "The Treatment of Financial Transactions in the SNA: A User Cost Approach," Economics working papers erwin_diewert-2014-8, Vancouver School of Economics, revised 20 Feb 2014.
  • Handle: RePEc:ubc:bricol:erwin_diewert-2014-8
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    File URL: http://www.economics.ubc.ca/files/2014/02/pdf_paper_erwin-diewert-14-03-usercostapproach.pdf
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    References listed on IDEAS

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    1. Robert Inklaar, 2010. "The Sensitivity Of Capital Services Measurement: Measure All Assets And The Cost Of Capital," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(2), pages 389-412, June.
    2. William A. Barnett & Shu Wu, 2011. "On User Costs of Risky Monetary Assets," World Scientific Book Chapters,in: Financial Aggregation And Index Number Theory, chapter 3, pages 85-105 World Scientific Publishing Co. Pte. Ltd..
    3. Diewert, W E, 1974. "Intertemporal Consumer Theory and the Demand for Durables," Econometrica, Econometric Society, vol. 42(3), pages 497-516, May.
    4. Robert Inklaar & J. Christina Wang, 2013. "Real Output of Bank Services: What Counts is What Banks Do, Not What They Own," Economica, London School of Economics and Political Science, vol. 80(317), pages 96-117, January.
    5. 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.
    6. Susanto Basu & Robert Inklaar & J. Christina Wang, 2011. "The Value Of Risk: Measuring The Service Output Of U.S. Commercial Banks," Economic Inquiry, Western Economic Association International, vol. 49(1), pages 226-245, January.
    7. Diewert W.Erwin, 2010. "User Costs versus Waiting Services and Depreciation in a Model of Production," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(6), pages 759-771, December.
    8. Feenstra, Robert C., 1986. "Functional equivalence between liquidity costs and the utility of money," Journal of Monetary Economics, Elsevier, vol. 17(2), pages 271-291, March.
    9. Rymes, T K, 1983. "More on the Measurement of Total Factor Productivity," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 29(3), pages 297-316, September.
    10. Kimberly D. Zieschang, 2016. "FISIM Accounting," CEPA Working Papers Series WP012016, School of Economics, University of Queensland, Australia.
    11. J Christina Wang, 2010. "Risk and bank service output," IFC Bulletins chapters,in: Bank for International Settlements (ed.), The IFC's contribution to the 57th ISI Session, Durban, August 2009, volume 33, pages 317-333 Bank for International Settlements.
    12. Keuning, Steven, 1999. "The Role of Financial Capital in Production," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(4), pages 419-434, December.
    13. Hancock, Diana, 1985. "The Financial Firm: Production with Monetary and Nonmonetary Goods," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 859-880, October.
    14. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
    15. W. Erwin Diewert, 1980. "Aggregation Problems in the Measurement of Capital," NBER Chapters,in: The Measurement of Capital, pages 433-538 National Bureau of Economic Research, Inc.
    16. Diewert, Erwin & Fixler, Dennis & Zieschang, Kimberly, 2011. "The Measurement of Banking Services in the System of National Accounts," Economics working papers erwin_diewert-2011-23, Vancouver School of Economics, revised 01 Sep 2011.
    17. Barnett, William A., 1978. "The user cost of money," Economics Letters, Elsevier, vol. 1(2), pages 145-149.
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    Cited by:

    1. Groslambert, Bertrand & Chiappini, Raphaël & Bruno, Olivier, 2016. "Desperately seeking cash: Evidence from bank output measurement," Economic Modelling, Elsevier, vol. 59(C), pages 495-507.

    More about this item

    Keywords

    User costs; banking services; deposit services; loan services; production accounts; System of National Accounts; FISIM; Financial Intermediation Servi;

    JEL classification:

    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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