2. Identifying Bubbles Jason Russo Assistant Statistician Economic Analysis and Reporting Branch Australian Bureau of Statistics

3. Overview Exploring the notion of 'bubbles' Some Australian experience Current work by the ABS Conclusions and suggestions for discussion

4. SNA The current state of the art in asset valuation. A quick return to 'first principles' for NSOs. SNA broadly says: Opening balance plus changes due to transactions plus other changes (eg, volume and revaluation) equals Closing balance.

5. SNA But SNA is more, it also provides: The framework for NSOs to record the sectoral balances of households, government, financial and non-financial corporations. An important tool in monitoring the ability of an economy as a whole to deal with adverse macroeconomic shocks. Of course there will be gaps in measurement, dependent on country context

6. The Notion Of Bubbles Meltzer's distinction Rational v's irrational bubbles There is not agreement in the way that NSOs would like... In practice, this distinction makes no difference...we are measuring market prices, not predicting them.

7. Australian Experiences

9. Australian Experiences (ABS Established House Price Index)

11. Australian Experiences

15. Australia & the GFC (source: www.budget.gov.au)

16. Australia & the GFC

18. ABS Work Engagement with users User groups Systemic reviews An ongoing dialogue (eg, quarterly liaison)

19. ABS Work Further work Development of ABS House Price Index Aspirations to further develop our statistics on 'balance sheets' Review of Financial Statistics - internal and external systemic review Responding to previous reviews (eg, the recent IMF ROSC, 2010)

20. Themes for discussion Important to keep asset price developments in context The need to maintain good institutional settings around statistics Coherence and accuracy a priority Vital to maintain engagement and an ongoing work program that is relevant and responds to emerging needs