MACROECONOMIC STATISTICS

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 3

Quantifying basic relationships, alternative interpretations of ”real”

levels/changes and the relevance of RGDI

Gábor Oblath

Outline

• The logic of SNA (continued)

• Macroeconomic statistics: three basic sources (GDP, BOP, FA)

• Magnitudes in ”real” terms

• The terms of trade

• RGDI

• Data on RGDI

The logic of SNA

• Detailed discussion

• Overview of transactions and concepts

• Accounting principles

• Simplified sequence of accounts

+

Capital transfers

=

-

GNDI

SNA: Four basic accounting principles

The accounts are built on the basis of the following four simple accounting principles:

a) All transactions are recorded on an accrual basis (i.e., payable and receivable), not on a cash basis (i.e., received and paid).

b) Resources (receivables) are recorded on the right side and uses (payables) on the left side of the accounts. Liabilities are recorded on the right side and assets the left side of the accounts;

c) The balancing or closing item, which is always the last item on the uses side of the accounts, closes (balances) the account;

d) The balancing item is always the opening item of the next account, located as the first entry on the resources side of the account.

SNA (simplified demonstration)

SNA (cont.)

Macroeconomic statistics: three basic sources (GDP, BOP, FA)

• Identities to be met, three approaches – ”Real” (production)

– Income – Financial

• Considerations regarding the sources – GDP

– BOP – FA

Understanding: the balance ”from above” and ”from below”

• BOP:

– From above: current+capital account – From below: financial account

• In detail :

http://www.mnb.hu/Statisztika/statisztikai-adatok-informaciok/adatok- idosorok/vii-kulkereskedelem/mnbhu_fizm_20090330

A GNI and GNDI from two sources

(aggregated NA, BOP, FA)

• GNI =

= GDP + NFI ( NA; BOP)

= ΣIP =IPh +IPc +IPg (NA –income-side)

• GNDI =

= GNI + NFTC ( NA;BOP)

= ΣID =IDh +IDc +IDg (NA – income-side)

NFI – net foreign income IP – primary income.

NFTC – unilateral current transfers ID – disposable income

h, c, g – index for households, corporations and government

Availability of the three sources a) NA

Hungary: STADAT

• http://portal.ksh.hu/portal/page?_pageid=37,602 145&_dad=portal&_schema=PORTAL

• http://portal.ksh.hu/portal/page?_pageid=37,594 202&_dad=portal&_schema=PORTAL

• http://statinfo.ksh.hu/Statinfo/themeSelector.jsp?

&lang=hu

b) BOP

http://www.mnb.hu/Statisztika/statisztikai- adatok-informaciok/adatok-idosorok/vii-

kulkereskedelem/mnbhu_fizm_20090330

c) Financial accounts

http://www.mnb.hu/Statisztika/statisztikai-adatok- informaciok/adatok-idosorok

http://www.mnb.hu/Statisztika/statisztikai-adatok- informaciok/adatok-idosorok/xi-

puszamlak/mnbhu_0601_osszefoglalo_informaciok

http://www.mnb.hu/Statisztika/statisztikai-adatok- informaciok/adatok-idosorok/xi-

puszamlak/mnbhu_nemz_modsz_idosorok090107

Consistency

Macroeconomic concepts of nominal income

• GDP: income from domestic production

• GDP+NFI = GNI (primary income)

– (GNI adjusted for reinvested earnings)

• GNI +NFTC = GNDI (incl. secondary income)

– GNDI+NFTK (not an income concept, but useful for macro-analysis)

Magnitudes in ”real” terms

• ”Volume-1”: comparisons in time

(magnitudes deflated by price indices)

• ”Volume-2”: cross country comparisons (PPP) [topic 7]

• ”Operational” [topic 4]

• Real exchange rate indices [topic 9]

• ”Real income” (terms-of- trade adjusted aggregate income) 

The terms of trade

• ToT (or:T/T) =100*Px/Pm

• If Px>Pm  transfer of income to the domestic economy (and vice versa)

• This is an implicit transfer (explain!)

• From the macro point of view

– relevant Px and PM: goods and services

RGDI

• RGDI: real gross domestic income (GDP adjusted for the effects of ToT)

RGDI_t = GDP_t/P_gdp +T

P_gdp: price deflator of GDP; T: trading gain/loss

T = (X M)/Pxm [(X/Px) –(M/Pm)]

X and M: exports and imports at current prices, Pxm: the average of export and import price indices

– T >0, if Px>Pm; T=0 if Px=Pm; T<0, if Px<Pm – Vol. index: RGDI’=RGDI_t/GDP_t-1

(Details : SNA

http://unstats.un.org/unsd/sna1993/tocLev8.asp?L1=16&L 2=11

16.151–16.156)

Data on RGDI

• Calculated data on both T and the index of RGDI are included in the AMECO-database

http://ec.europa.eu/economy_finance/ameco/user/serie/S electSerie.cfm

• RGDI: 6. 6.1 GDP at const. prices adjusted for the impact of the T/T

• T: 9. 9.7 Terms of trade  impact of the T/T on real income

• Interpretation:

• T = RGDI_t – GDP_t/P_gdp

• Impact of the terms of trade: T/GDP_t–1

T in percent of GDP in (t–1) in four countries (source: AMECO)

0,94 0,96 0,98 1,00 1,02 1,04 1,06 1,08

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Czech Republic

Hungary Poland Slovakia

T/(GDP-1) (1999=1)

Other income aggregates may/should also be adjusted for the terms-of-trade effect

1. RGDI 2. RGNI;

3. RGNDI

4. RGNDI + real capital transfers