1. National Accounts Rui Mota rmota@ist.utl.pt Tel. 21 841 9440 Ext. 3440 rmota@ist.utl.pt Tiago Domingos October 2010 Engenharia do Ambiente

2. National Accounts System of National Accounts is a comprehensive accounting framework within which economic data can be compiled and presented in a format that is designed for purposes of economic analysis, decision-taking and policy-making. Integrates a set of macroeconomic accounts, balance sheets and tables based on a set of internationally agreed concepts, definitions, classifications and accounting rules. Accounts compiled for a succession of time periods, thus providing a continuing flow of information, indispensable for the monitoring, analysis and evaluation of the performance of an economy over time.

5. Aggregation 5 Sectors: –Households –Firms –Financial Intermediaries (banks, …) –Governments (national and local) –Rest Of the World (ROW) 4 Markets (Supply and Demand): –Goods and services –Resources (labor, land and capital) –Money (loanable funds) –Foreign exchange

6. Circular flow of income Factors: Labor, Land, Capital Factor payments: Wage, Rents, Interests, Profits – become income. Expenditures: on goods and services (output) 1 – Income approach: Y = Wage + Rent + interest + operating surplus 2 – Output approach: Y = market value of all produced output (Σ VA) 3 – Expenditure approach: Y = C Households Firms Output Factors Factor payments: Y Expenditures: C 1 2 3 € €

7. Circular flow of income Balance to: –Households: Y - T net = C + S, T net = T- Tr –Firms: Y = C + I + G + X - M –Government: ΔGov = T net - G –FI: S + ΔGov + B - L = I –ROW: X - M = L - B Households Firms C FI S I Gov. Y T Tr G ROW X M ΔGov Borrow Lend - Market for outputs

8. National Accounts Identity C I X M

9. Main Aggregates National (Residence) - Primary income flows to ROW Product / Income + Primary income flows from ROW Domestic (Territory) Net + Consumption Fixed Capital (CFC) Aggregate X - Consumption of Fixed Capital (CFC) Gross X – Domestic produc, Income, Saving, Disposable income,...

10. GNI = GDP + Y’ RM. Where Y’ RM = Net income payable to non-resident units for production factors. Domestic Product vs. National Income

11. Main Aggregates GDP + Primary income flows from ROW - Primary income flows to ROW = Gross National Income (GNI) + Current net transfers from ROW = Gross Disposable Income (GDI) - Final consumption (Private and Government) = Gross Saving (S) Net Domestic Product (NDP) = Net National Income (NNI) = Net Disposable Income (NDI) = Net Saving (NS) Subtract CFC

12. Domestic Product vs. National Income Source: AMECO database

13. Gross Product vs. Net Product [euros 2000] Source: AMECO database

14. Gross/Net Saving in Portugal [euros 2000] Source: AMECO database