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Www.bea.gov KLEMS and the NIPAs J. Steven Landefeld, Director World KLEMS Conference Harvard University August 20 th, 2010.

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Presentation on theme: "Www.bea.gov KLEMS and the NIPAs J. Steven Landefeld, Director World KLEMS Conference Harvard University August 20 th, 2010."— Presentation transcript:

1 KLEMS and the NIPAs J. Steven Landefeld, Director World KLEMS Conference Harvard University August 20 th, 2010

2 2 Integration: the foundation for KLEMS work Provide a complete set of accounts for the total economy and various sectors Ensure consistency in macroeconomic data used in the accounts Integrated statistics allow users to focus on analysis rather than making adjustments to the data

3 3 Importance of consistent data by Industry Differences in Growth Rates of Real Value Added, 2007 NOTE: Measures of value added were allowed to increase (decrease) by the difference in wage data between BLS and the Census Bureau. [Percent]

4 4 Importance of consistent data on Income Percent Change of Profit Measures

5 5 Integrated and Expanded Accounts Integrated accounts would include: More complete reconciliation and balancing of the components of the U.S. accounts produced jointly by BEA, BLS, and the FRB Common concepts Business sector, non-farm business, etc. Common methods Seasonal adjustment, extrapolation and interpolation Common source data Accuracy and consistency vs. historical practice Common, and or, reconciled business registers and classifications Expanded data sharing authority

6 6 Integrated and Expanded Accounts Integrated accounts would include: A complete production account, based on: Integration of NIPAs and MFP accounts, with real and nominal values Addition of estimates of capital services for government and nonprofits. Longer-term: development of output based measures of government and non-profit product. A complete integration of real and financial accounts, based on: Integration of BEAs NIPA, Wealth, Balance of Payments, Industry, and Regional data with the Feds Flow of Funds and Balance Sheet Estimates

7 7 Integrated and Expanded Accounts Integrated accounts would include: R&D, Natural Resources, and Human Capital Energy-Environment Health Care, Household Production, and Pensions

8 8 Current work & future plans on integration efforts Existing Integration Work: Better integration of BEA Industry and GDP Accounts; quarterly GDP by industry Quarterly Final Expenditures, Income, and Production-based estimates FRB-BEA Annual and Quarterly Estimates: BLS-BEA Annual GDP-MFP Estimates:

9 9 Integrated Production Account GDP for government and nonprofits is now measured as compensation plus depreciation (capital consumption allowances) More complete measure of the cost or value of capital services would be rental value: Rental Value = rNS + Dep – Expected Capital Gain or Loss Picking an appropriate rate of return is difficult (private business sector IRR used below) SNA recommended supplemental item

10 10 Integrated Production Account Other adjustments, including Private sector labor and capital inputs, Government labor inputs (adjusted for labor composition) Such an integrated system would enable users to identify the sources of changes in productivity and cross-walk them to GDP and its components: Product Industry Type of income/value-added Gross Output Final sales Intermediate products

11 11 International Integration: Closing the gap on international inconsistencies: FISIM treatment Valuations in factor, basic, producer prices used in value added Measuring depreciation Business accounting standards (IFRS vs. GAAP for R&D) Seasonal adjustment practices Software: accounting & prices Common business registers

12 12 Variation in software prices

13 13 Variation in capitalized services

14 14 Benefits of International Integration: Value of consistent macro estimates for coordinated fiscal, monetary, trade, regulatory and tax policies: EU KLEMS: SNA 2008 IMF Balance of Payments Manual EU Price Manual UN Guidelines on Integrated Economic Statistics


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