Presentation on theme: "1 Statistical implications of the crisis Marco Mira dErcole Counsellor, OECD Statistics Directorate Working Party on International Trade in Goods and Trade."— Presentation transcript:
1 Statistical implications of the crisis Marco Mira dErcole Counsellor, OECD Statistics Directorate Working Party on International Trade in Goods and Trade in Services, November 2009
2 Context: OECD initiatives Premise: if the crisis does not call into question our statistical system, it does provide an opportunity to assess its adequacy to identify structural weaknesses, to value assets and to monitor performance This premise has provided the context for a range of initiatives undertaken by the OECD Statistics Directorate to: Gather statisticians and policy analysts across the house (i.e. Horizontal Group on Statistics on the Crisis) Organise workshops with experts in specific fields (e.g. social statistics) Bring together these strands of work in a paper for CSTAT, discussed in June 2009, revised now
3 Main features of the crisis Both the size and qualitative features of the crisis justify this initiative Starts at the centre of developed world rather than at its periphery, as had been the case with crises of Mexico in early-80s; Sweden and Japan in early-90s; South-East Asia and Russia in late-90s; Argentina in early-2000s Focal point in the financial sector (shadow banking), with high leverage, maturity mismatches between assets and liabilities, contagion to other financial markets through securitisation Overstretched household sector, which accumulated debt to sustain private consumption, in context characterised by stagnant income for most households Rapid spread from US to other countries, due to interconnectedness of markets and regions, made the crisis truly global. Globalisation, beyond its benefits, implies new vulnerabilities
4 Statistical implications are specific to each field Focus of the paper on financial and social statistics Financial statistics. Existing data did not record full expose of financial sector to real estate and mortgages. Further, aggregation of data for subcomponent of financial sector showed only moderate rise in leverage and maturity mismatch. Last, balance sheets need to be stressed tested to assess extent of risks Social statistics. Existing social statistics built on premise that social change occurs slowly and can be monitored through low-frequency surveys. Increasing frequency of existing OECD collection of income distribution. Large gaps on distribution of household wealth, over-indebtedness and payment arrears
5 Statistical implications for international trade Crisis affected trade flows disproportionately, both historically and relative to domestic output. Issue about the adequacy of statistics in identifying the factors at work: changes in structural features of trade flows (e.g. linked to vertical specialisation), financial factors (e.g. collapse of letter of credits) Crisis reflected the existence of global imbalances. Capital inflows to deficit countries fuelled asset price inflation and debt expansion. Despite some easing of these imbalances over past two years, little indications that yesterdays trade champions are ready to forego their role.
6 Cross-cutting statistical implications Coverage. In financial field, data on balance sheets and asset prices are inadequate to assess sustainability of debt accumulation, especially for households and financial corporations Timeliness. Time lags for availability of financial statistics exceeds 2 years, even longer for social statistics. Greater investments in statistical capacity but also low- costs steps to ease trade-off between timeliness and accuracy Access to micro-data. Much of our statistical information is in the form of measures of central tendency. Considering the full distribution for a range of key variables would have allowed indentifying risks in part of the system, and better managing the consequences of the crisis Story telling. Warning signals were not picked up partly because of reluctance by statisticians in engaging in story telling
7 Broader implications for OECD statistical work Changed political discourse, domestically and internationally. Domestically, discussions on exit from emergency measures raise questions but on type of development paths (more balanced and sustainable ) that we want to enter. Internationally, G20 process and OECD efforts to feed that process with relevant outputs: importance of dialogue with EE countries Beyond-GDP agenda. The crisis give salience to the importance of alternative metrics for our information system, shifting from system focused on market production to one that recognises importance of peoples well-being. From and academic discussion to a policy process (Stigltiz Commission, G20 leaders statement, OECD follow-up). Importance of discussing with various subsidiary bodies of the Organisation how they could best contribute to that agenda