MACROECONOMIC STATISTICS
MACROECONOMIC STATISTICS
Sponsored by a Grant TÁMOP-4.1.2-08/2/A/KMR-2009-0041 Course Material Developed by Department of Economics,
Faculty of Social Sciences, Eötvös Loránd University Budapest (ELTE) Department of Economics, Eötvös Loránd University Budapest
Institute of Economics, Hungarian Academy of Sciences Balassi Kiadó, Budapest
MACROECONOMIC STATISTICS
Author: Gábor Oblath
Supervised by Gábor Oblath January 2011
ELTE Faculty of Social Sciences, Department of Economics
MACROECONOMIC STATISTICS
Week 4
Problems of measurement and operational indicators
Gábor Oblath
Outline
• Discussion of three issues related to macro-statistics (interpretation and measurement) – based on
presentations by students
• Operational concepts
The three issues
• Is the GDP a sound indicator? Limitations of GDP
– Report by the Commission on the Measurement of Economic Performance and Social Progress (pp. 21-40)
http://www.stiglitz-sen-fitoussi.fr/documents/rapport_anglais.pdf
• The informal/hidden economy
– Friedrich Schneider and Dominik H. Enste: Shadow Economies: Size, Causes, and Consequences.
http://www.econ.jku.at/members/Schneider/files/publications/JEL.pdf
• Questions related to the measurement of the CPI
– Robert J. Gordon: The Boskin Commission report: a retrospective one decade later.
http://www.nber.org/papers/w12311.pdf
Questions for discussion
• Should GDP be replaced by alternative indicator(s)?
• How serious are the limitations of official statistics due to the existence of the
hidden economy?
• Should we believe official price indices?
Operational concepts
• The ”real” value (but not the ”volume”) of
– income/expenditure aggregates and balances – that include interest revenues/expenditures
• Examples:
– Government expenditures and balance
– Household income, expenditure (including debt service) and savings (NL)
– Expenditures, revenues and balance (NL) of the national economy
Why/when are operational concepts relevant
• Why?
– Interest expenditures/revenues consist of two distinct components
• real interest
• inflation compensation – the latter: implicit amortisation (repayment of the real value of debt)
• When?
– If inflation is high
– If debt relative to income is high – especially relevant, if both hold
• Assumption: rational economic agents treat the two components differently.
Let us illustrate the theoretical relevance of the concept
• Obstfeld–Rogoff: Foundations of
International Macroeconomics (1996):
• Nominal vs. real current accounts
Savings-investment balance
O-R: Foundations… p.18: nominal vs. ”real” CA
O-R: Foundations… p. 18 (cont.)
O-R: Foundations… p. 18 (cont.)
Good news for users of Hungarian statistics
• Hungary’s Financial Accounts (FA) include indicators for the ”real”
(operational) external balance (NL).
• Operational balances (NL) for each sector of the economy
• In this respect HU’s FA is exceptional in international comparison.
The fiscal deficit/GDP is increasing with inflation
Assumption: no real GDP-growth, the primary (non-interest) balance is zero.
(D: deficit; B: debt, i: nominal interest rate, inflation rate r: real interest rate)
Deficit: D1=B1– B0 = iB The deficit/GDP ratio:
1 1
0
1 1
1
0 0 0
1 0 1
1
r
GDP B GDP
r B
GDP iB GDP
D
i
Example: why the operational balance may
be important
Readings on the operational balance
• SNA
http://unstats.un.org/unsd/sna1993/to cLev8.asp?L1=19&L2=11
• Two important articles:
Tanzi–Blejer–Teijeiro: Inflation and the
Measurement of Fiscal Deficits. IMF Staff Papers, 1987/4.
Blejer–Cheasty: The measurement of Fiscal Deficits: Analytical and Methodological Issues.
JEL 1991/4.
Operational balances in HU’s FA
• Transactions:
http://english.mnb.hu/Statisztika/data-and-
information/mnben_statisztikai_idosorok/mnben_el v_net_lending/mnben_0602_nemz_modsz_idosor ok090107
Nominal minus operational balances:
inflation compensation (if >0: receives)
-8,0%
-6,0%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
1991
1993
1995
1997
1999
2001
2003
Házt Váll ÁHT
Nemzetgazd
Households
Gov.
Corporations
General government: nominal and operational NL (in % of GDP)
-25 -20 -15 -10 -5 0 5 10
1990. I. 1991. I.
1992. I. 1993. I.
1994. I. 1995. I.
1996. I. 1997. I.
1998. I. 1999. I.
2000. I. 2001. I.
2002. I. 2003. I.
2004. I. 2005. I.
2006. I. 2007. I.
2008. I. 2009. I.
2010. I. NL_Államháztartás
NL(op)_Államháztartás NL(op)_ÁHT -NL_ÁHT
%
NLgov
Op NLgov Op NLgov-NLgov
Households: nominal and operational NL (in % of GDP)
-10 -5 0 5 10 15 20 25 30
1990. I. IV. III. II. 1993. I. IV. III. II. 1996. I. IV. III. II. 1999. I. IV. III. II. 2002. I. IV. III. II. 2005. I. IV. III. II. 2008. I. IV. III.
NL_háztartások NL(op)_háztartások NL(op) házt-NL_házt
NL
OpNL
NL-OpNL
Rest of the world (ROW): nominal and operational NL (in % of GDP)
-10 -5 0 5 10 15 20
1990. I. IV. III. II. 1993. I. IV. III. II. 1996. I. IV. III. II. 1999. I. IV. III. II. 2002. I. IV. III. II. 2005. I. IV. III. II. 2008. I. IV. III.
NL_Külföld NL(op)Külföld
NL(op) külföld-NL_külföld
NL
Op NL
OpNL-NL
