national income accounts: overview and applications thorvaldur gylfason
TRANSCRIPT
National National Income Income Accounts: Accounts: Overview Overview and and ApplicationApplicationss
Thorvaldur Gylfason
Y + Z = C + I + G + XY + Z = C + I + G + X Aggregate supply = aggregate Aggregate supply = aggregate
demanddemand Y = C + I + G + X – Z Y = C + I + G + X – Z
(expenditure)(expenditure) where C = Cwhere C = Cdd + C + Czz, I = I, I = Idd + I + Izz, etc., etc.
Y = CY = Cdd + I + Idd + G + Gdd + X + Xdd
Y = C + S + T (allocation)Y = C + S + T (allocation) Y = wages+ interest + rent Y = wages+ interest + rent
(income)(income) Y = coffee + tea + ... (production)Y = coffee + tea + ... (production) Four equivalent definitionsFour equivalent definitions of GNP of GNP
The meaning of GNP
I = S + (T – G) + (Z – X)I = S + (T – G) + (Z – X) = private + public + foreign = private + public + foreign
savingsaving (I – S) + (G – T) = Z – X(I – S) + (G – T) = Z – X
Domestic deficit = foreign deficitDomestic deficit = foreign deficit Example: U.S in 1980sExample: U.S in 1980s
Related conceptsRelated concepts NNPNNP GDPGDP GDIGDI GNIGNI
Saving and investment
NNPNNP = GNP – depreciation= GNP – depreciation GNP = C + IGNP = C + Igg + G + X – Z + G + X – Z NNP = C + INNP = C + Inn + G + X – Z + G + X – Z GNP – NNP = IGNP – NNP = Igg – I – Inn = depreciation = depreciation Recall:Recall: I = I = K + K + KK
GDPGDP = GNP – FI= GNP – FI FI = wages + interest (net) earned FI = wages + interest (net) earned
abroad abroad GNP = GDP + FIGNP = GDP + FI GNP is legal concept, GDP is GNP is legal concept, GDP is
geographicalgeographical Turkey: GNP > GDP; Argentina: GNP < Turkey: GNP > GDP; Argentina: GNP <
GDPGDP
Related concepts
GDIGDI = GNP + transfers= GNP + transfers= GDP + FI + TR= GDP + FI + TR
Related concepts
YY X - ZX - Z DefinitionDefinition
GDPGDP Trade balanceTrade balance Goods and Goods and nonfactor nonfactor servicesservices
GNPGNP Current Current accountaccount
Goods and Goods and servicesservices
GDIGDI Current Current account incl. account incl. transferstransfers
Goods and Goods and services plus services plus transferstransfers
GNIGNI = GNP + terms of trade effect= GNP + terms of trade effect GNP = E + X – ZGNP = E + X – Z
where E = C + I + G and X = Xwhere E = C + I + G and X = XNN/P/PXX
GNI = E + X* - Z GNI = E + X* - Z where X* = Xwhere X* = XNN/P/PZZ
TT = GNI – GNP = X* - X = XTT = GNI – GNP = X* - X = XNN/P/PZZ - - XXNN/P/PXX
= (X= (XNN/P/PXX)(P)(PXX/P/PZ Z -1)-1) PPxx goes up goes up GNI goes up for given GNPGNI goes up for given GNP PPzz goes up goes up GNI goes down for given GNI goes down for given
GNPGNP
Related concepts
Allows us to measure GNPAllows us to measure GNP Domestic usesDomestic uses International comparisonsInternational comparisons Measuring growthMeasuring growth
Why important?
Does not include nonmarket Does not include nonmarket activityactivity Work at homeWork at home
Does not distinguish between Does not distinguish between rising vs. falling incomesrising vs. falling incomes equal vs. unequal distributionequal vs. unequal distribution stocks vs. flowsstocks vs. flows
environmentenvironment resources (natural and human)resources (natural and human)
right vs. wrong exchange ratesright vs. wrong exchange rates work vs. leisurework vs. leisure
Qualifications
NIA: SNIA: S – I = G – T + X – Z – I = G – T + X – Z BOP: BOP: R = X – Z + R = X – Z + DDFF
GFS: G – T = GFS: G – T = B + B + DDGG + + DDFF
MS: MS: M =M = D + D + R = R = DDGG + + DDPP + + RR
Linkages
NIA: SNIA: S – I = G – T + – I = G – T + X – ZX – Z BOP: BOP: R =R = X – ZX – Z + + DDFF
GFS: G – T = GFS: G – T = B + B + DDGG + + DDFF
MS: MS: M =M = D + D + R = R = DDGG + + DDPP + + RR
Linkages
NIA: SNIA: S – I = – I = G – TG – T + X – Z+ X – Z BOP: BOP: R = X – Z + R = X – Z + DFDF GFS:GFS: G – TG – T = = B + B + DDGG + + DDFF
MS: MS: M = M = D + D + R = R = DDGG + + DDPP + + RR
Linkages
NIA: SNIA: S – I = G – T + X – Z – I = G – T + X – Z BOP:BOP: RR = X – Z + = X – Z + DDFF
GFS: G – T = GFS: G – T = B + B + DDGG + + DDFF
MS:MS: M =M = D +D + RR = = DDGG + + DDPP + + RR
Linkages
NIA: SNIA: S – I = G – T + X – Z – I = G – T + X – Z BOP: BOP: R = X – Z +R = X – Z + DDFF
GFS: G – T = GFS: G – T = B + B + DDGG + + DDFF
MS:MS: M =M = D + D + R = R = DDGG + + DDPP + + RR
Linkages
NIA: SNIA: S – I = G – T + X – Z – I = G – T + X – Z BOP: BOP: R = X – Z + R = X – Z + DDFF
GFS: G – T = GFS: G – T = B + B + DDGG + + DDFF
MS: MS: M =M = D + D + R =R = DDGG + + DDPP + + RR
Linkages
GFS: G – T = GFS: G – T = B + B + DDGG + + DDFF
NIA: INIA: I – S = – S = DDPP - - M - M - BB G – T + I – S = G – T + I – S = D + D + DDFF - - MM
= = DDFF - - RR
= X – Z= X – Z Therefore, Therefore, R = X – Z + R = X – Z + DDF F
= X – Z + F= X – Z + F
We can use NIA and GFS to derive We can use NIA and GFS to derive BOPBOP
Application
Y = ALY = ALaaKK1-a1-a
where A = E(K/L)where A = E(K/L)aa
Y = EKY = EK Y/Y = Y/Y = A/A + a(A/A + a(L/L) + (1-a)(L/L) + (1-a)(K/K)K/K) Y/Y = q + a(Y/Y = q + a(L/L) + (1-a)(sY/K - L/L) + (1-a)(sY/K - )) g = q + (2/3)0.015 + (1/3)((0.21(1/3) – g = q + (2/3)0.015 + (1/3)((0.21(1/3) –
0.04)0.04) = q + 0.01 + 0.01= q + 0.01 + 0.01
g = 0.03 g = 0.03 q = 0.01q = 0.01 So, US growth can be traced to labor, So, US growth can be traced to labor,
capital, and technology in roughly equal capital, and technology in roughly equal proportionsproportions
Growth accountingRecall:Recall: I = I = K + K + KK
Growth accounting g = sE - g = sE - = 0.06= 0.06 E = 0.30E = 0.30 E = 0.40E = 0.40 E = 0.50E = 0.50
s = 0.10s = 0.10 g = -g = -0.030.03
g = -g = -0.020.02
g = -g = -0.010.01
s = 0.20s = 0.20 g = 0.00g = 0.00 g = 0.02g = 0.02 g = 0.04g = 0.04
s = 0.30s = 0.30 g = 0.03g = 0.03 g = 0.06g = 0.06 g = 0.09g = 0.09
s = 0.40s = 0.40 g = 0.06g = 0.06 g = 0.10g = 0.10 g = 0.14g = 0.14
Country Country AA
Country BCountry B
A Tale of Two Countries
Country Country AA
Country BCountry B
Girls at primary Girls at primary schoolschool
100%100% 72%72%
A Tale of Two Countries
Country Country AA
Country BCountry B
Girls at primary Girls at primary schoolschool
100%100% 72%72%
Investment ratioInvestment ratio 25%25% 11%11%
A Tale of Two Countries
Country Country AA
Country BCountry B
Girls at primary Girls at primary schoolschool
100%100% 72%72%
Investment ratioInvestment ratio 25%25% 11%11%Export ratioExport ratio 58%58% 23%23%
A Tale of Two Countries
Country Country AA
Country BCountry B
Girls at primary Girls at primary schoolschool
100%100% 72%72%
Investment ratioInvestment ratio 25%25% 11%11%Export ratioExport ratio 58%58% 23%23%Primary export Primary export ratioratio
33%33% 80%80%
A Tale of Two Countries
Country Country AA
Country BCountry B
Girls at primary Girls at primary schoolschool
100%100% 72%72%
Investment ratioInvestment ratio 25%25% 11%11%Export ratioExport ratio 58%58% 23%23%Primary export Primary export ratioratio
33%33% 80%80%
InflationInflation 10%10% 18%18%
A Tale of Two Countries
Country Country AA
Country BCountry B
Girls at primary Girls at primary schoolschool
100%100% 72%72%
Investment ratioInvestment ratio 25%25% 11%11%Export ratioExport ratio 58%58% 23%23%Primary export Primary export ratioratio
33%33% 80%80%
InflationInflation 10%10% 18%18%Growth per capitaGrowth per capita 3%3% -2%-2%
A Tale of Two Countries
And the countries And the countries are:are: MauritiusMauritius MadagascMadagasc
arar
Girls at primary Girls at primary schoolschool
100%100% 72%72%
Investment ratioInvestment ratio 25%25% 11%11%Export ratioExport ratio 58%58% 23%23%Primary export Primary export ratioratio
33%33% 80%80%
InflationInflation 10%10% 18%18%GrowthGrowth 3%3% -2%-2%
A Tale of Two Countries
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4500
Madagascar
Mauritius
Madagascar and Mauritius:GNP per capita 1964-99
Current US$,Atlas method