2. Long-Term Development of the SNA
November 2008
Session 2: Relevance of Theoretical Foundations of the 2008 SNA
Ian Ewing
Australian Bureau of Statistics

3. Outline Some general remarks Points arising from the Hill Paper
Points arising from the Van Ark paper

4. SNA in Context Human Activity Biophysical environment
Economic Activity
SNA

5. Maturity of Statistical System
Market Economy
Well developed/ Mature
Total Economic Activity
Developed
Human Activity
Patchy / incomplete
Human Activity <> Biophysical Activity
Undeveloped

6. Maturity of Statistics of Economic Activity
Developed Countries
Well developed
Developing Countries
Patchy
Least Developed Countries
poor to non-existent

7. Issues
Statistical priorities of government are shifting to the social and biophysical domain
These are areas in which structured frameworks such as SNA have not been developed
There is competition between
statistical providers
structured solutions
Marginalisation of NSOs
There is a global need for sound statistics, but statistical progress is lagging in developing countries

8. National Accounting to meet priorities
social / biophysical
(MFP> human K >
SEEA
Maintaining Relevance
to a changing
market economy
20%
National Accounts
development
program
40%
% effort
context: enhanced stakeholder engagement;
stronger statistical leadership
40%
Enhancing
relevance for
developing
countries

9. Peter Hill's Proposals An SNA superset relevant
A "market"
SNA subset
An SNA superset relevant
to social / biophysical
domain
Peter Hill's proposals
2 SNA components
Developing
economies?

10. The Policy Tensions
The inclusion of a somewhat arbitrary selection of non-monetary transactions in the system may actually detract from the usefulness of the accounts for purposes of monitoring and analysing short-term fluctuations and market disequilibria (para 23)
The option of replacing the present SNA by a more broadly based system that includes many more non-monetary transactions no longer looks attractive (para 21)

11. Resolving the policy tensions
The way out of this impasse is to have two systems of accounts: one geared primarily to short term analysis and the other to long term analysis..... this possibility has usually been rejected on the grounds that it would cause confusion and be unacceptable to users. (para 30)
This solution has merit and the main stated objection can be avoided with careful naming, for example.....
domestic market product (for short run)
domestic economic product (for long run)

12. Resolving the policy tensions (cont)
Discussion point.....
domestic market product requires a boundary such that only transactions in the real accounts that have a counterpart in the financial account are included.
such a tight definition would
aid precision in communication
aid precision in the linkages between policy actions and results
be appropriate for short-term (quarterly?) indicators

13. Resolving the policy tensions (cont)
Discussion Point....
Domestic economic product requires a boundary appropriate for growth analysis. Ideally this should include all factors relevant for explaining multifactor productivity.
Accounts compiled to this boundary may be required at reduced periodicity and timeliness than the short run accounts, annually?

14. Hill's other issues
Own account production, interest and capital services and structure of production account
These are important issues for consideration, but not of the same strategic order as the other issues in the paper.

15. Thank you for your attention