Integration of U.S. macroeconomic accounts: a progress report

Business Economics, April, 2005 by Robert P. Parker

Next Steps

The joint effort of BEA and FRB staffs has produced a first set of integrated sector accounts for the United States following, to the extent possible, international guidelines along with the recommendations presented in April 2004 by Teplin, et al. The authors reported that additional effort would be needed to produce the estimates on a continuing basis or extend them for the period before 1985. They also reported that an even greater effort would be needed to implement improvements to the U.S. accounts that would eliminate inconsistencies within these accounts, expand them to provide a full set of accounts, or improve their consistency with the international guidelines.

With regard to the elimination of inconsistencies within the U.S. accounts, Teplin, et al. noted the problems related to the different methodologies for the treatment of captive finance corporations and preparation of estimates on state and local governments, the inconsistency of the definition of sectors within the NIPAs, and the reclassification of personal bank trust and miscellaneous financial assets in the FFAs. To expand the coverage of the U.S. accounts, the authors discussed the need to develop further the other changes in volume and revaluation accounts through a review of the accounting techniques used in source data and whether those techniques align with what is needed for the accounts. To provide complete balance sheets, they noted the need to develop improved source data for real estate values, especially for the government sector, and improved methodologies for separating the market value of land and structures. Finally, improving consistency with international guidelines, especially the consistency of the definitions of the sectors, were linked primarily to the availability of improved source data.

Teplin, et al. reported that closer coordination between the agencies would be needed to ensure that certain critical elements--such as sector boundaries, alternative data sources, and treatment of transactions--would reduce the inconsistencies in the existing accounts. BEA's Strategic Plan outlines a number of research and development activities related to the development of integrated accounts. Work is already underway to examine sector definitions, with particular consideration given to the development of improved source data on government business enterprises. Other research is also being conducted on improving the consistency of source data between the NIPAs and FFAs, for example, to improve consistency of NIPA interest flow estimates with FFA estimates of interest-bearing assets and liabilities. In addition to the joint staff work noted above, the authors noted that efforts at the FRB are directed toward improving integration in the capital accounts, especially disaggregating the combined financial sectors. In conjunction with that work, there will be an effort to develop detailed information for the other changes in volume accounts. The authors proposed future work to eliminate additional types of inconsistencies, to enhance the presentation of the existing accounts and Draft SNA-USA, and to produce national balance sheets on a regular basis. However, progress will depend on appropriate allocation of staff by the two agencies to the joint effort.