NABE presidential address: building improved official statistics for decisionmaking - National Association of Business Economists - Transcript

Business Economics, Jan, 1994 by Joseph W. Duncan

2. The U.S., which has long used a different framework (the National Income and Product Accounts-NIPA), has already announced plans to adopt the concepts of the SNA.

3. The SNA fosters standard definitions and concepts along with a flexible system that can be modified as required by future conditions.

4. Expanded use of the SNA by other nations will contribute to improved international comparability.

Consequently, the recent decision by the Bureau of Economic Analysis to implement the 1993 System of National Accounts should be accelerated as part of building a statistical system for the future.

A number of recommendations for improvements in data collection are required before developing better national income estimates. We identify nineteen specific recommendations that are long overdue and that will contribute to the implementation of the System of National Accounts. Specific recommendations are listed in Appendix 1 of this article.

INTERNATIONAL STATISTICS

The interdependence of the world economy has increased dramatically and will intensify in the future. Major business organizations now make decisions on a global basis both for inputs to their products and services and for markets. In a statistical sense, linkages among countries are captured in the balance of payments accounts of individual countries as a reflection of flows of trade, services and capital. With the differing systems among countries for banking regulation, for taxing of individuals and industry, for stimulating and controlling trade and for control of currency and exchange rates, many difficulties occur in building the type of information system that will adequately meet the needs of public and private decisionmakers involved in international commerce.

The need for substantial improvement in international statistics is clear from the failure of reports from all countries to balance. The individual categories in the world tabulation of the balance of payments should, in principle, sum to zero. The world discrepancy in the current account topped $100 billion in 1990 and decreased somewhat in 1991. Errors of this magnitude indicate that many of the world's balance of payments tabulations are subject to considerable errors.(7)

Statistics for the 21st Century discusses selected problems with data collection for trade statistics, especially in the services area, for international capital flows including foreign direct investment and data on international capital markets. Two recent studies by the National Academy of Sciences have drawn attention to needs for improving trade statistics(8) and for dealing with international capital flows.(9) We make nine additional specific recommendations we believe can be implemented as a first step in addressing these issues (see Appendix 2).

SOME IMMEDIATE STEPS

The normal lags in creating new statistical series are well documented. As a minimum it takes ten years to bring a new statistical series into use. As noted earlier, agreement on the SNA revision took over a decade and implementation will take a long time. Yet there are some things that can be done now. Many of the recommendations made in Statistics for the 21st Century are the result of many years of study and recommendations from many groups. What is needed is an aggressive program to push for a faster pace of change and to consider the implications for the longer term.