Chapter2_MeasureFacts

Chapter2_MeasureFacts - How We Measure Facts Juan...

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Unformatted text preview: How We Measure Facts Juan Rubio-Ram&rez Duke University and Federal Reserve Bank of Atlanta January 9, 2009 Juan Rubio-Ram&rez (DUKE) Measure Facts January 9, 2009 1 / 33 Data Macroeconomics is built around the interface of theory and data. Di/erent sources: 1 National accounting: 1 National income and product accounts (NIPA). 2 Input-Output and industry accounts. 3 Flow of funds account. 4 Satellite Accounts: &xed assets in the U.S. economy, research and development, regional accounts, international accounts. 2 International comparisons: 1 Summer-Heston Penn World Table. 2 U.N. National Accounts Main Aggregates Database. 3 OECD and IMF data. 3 Micro data: 1 Census data. 2 Survey of Consumer Expenditure (CEX). 3 Panel Study of Income Dynamics (PSID). 4 Survey of Consumer Finances (SCF). 5 Many others.... Juan Rubio-Ramrez (DUKE) Measure Facts January 9, 2009 2 33 A Guide to NIPA&s What is the goal? When did it begin 1 U.S.: Simon Kuznets (Nobel in 1971). 2 U.K.: Richard Stone (Nobel in 1984) Why? Great depression+Keynesian revolution+Second World War. Constant development of better measures of economic activity. Elaborated by Bureau of Economic Analysis, an agency of the U.S. Department of Commerce: http://www.bea.gov/ Currently, annual data since 1929 and quarterly data since 1947. Juan Rubio-Ramrez (DUKE) Measure Facts January 9, 2009 3 / 33 NIPA Framework NIPA is organized around 7 summary accounts and 299 tables: 1 Domestic Income and Product account. 2 Private Enterprise Income Account. 3 Personal Income and Outlay Account. 4 Government Receipts and Expenditures Account. 5 Foreign Transactions Current Account. 6 Domestic Capital Account. 7 Foreign Transactions Capital Account. Juan Rubio-Ram&rez (DUKE) Measure Facts January 9, 2009 4 / 33 Accounting Principles Comprehensive, coherent, and consistent view of the economy. Integrated with industry, wealth, regional, and Input-Output accounts. Double entry book-keeping: resource and use. Valuation criteria: market value (direct or imputed). Why? Accrual-accounting. Monthly, quarterly, and yearly data. Juan Rubio-Ram&rez (DUKE) Measure Facts January 9, 2009 5 / 33 Accrual-accounting. versus Cash-accounting Accrual method. Income is counted when the sale occurs, and expenses are counted when you receive the goods. You don&t have to wait until you see the money, or actually pay money, to record a transaction. Cash method. Under the cash method, income is not counted until cash is received, and expenses are not counted until they are paid. Example: Your computer installation business nishes a job in November, and doesn&t get paid until three months later in January. Under the cash method, you would record the payment in January....
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Chapter2_MeasureFacts - How We Measure Facts Juan...

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