I. INTRODUCTION
F. Uses of the SNA
| 1.29. | The SNA is a multi-purpose system, as stated above, designed for economic analysis, decision-taking and policy-making, whatever the industrial structure or stage of economic development reached by a country. The basic concepts and definitions of the System depend upon economic reasoning and principles which should be universally valid and invariant to the particular economic circumstances in which they are applied. Similarly, the classifications and accounting rules are meant to be universally applicable. There is no justification, for example, for seeking to define the components of a production account - output, intermediate consumption and gross value added - differently in less developed than in more developed economies, or in large relatively closed economies than in small open economies, or in high- inflation economies than in low-inflation economies. Certain definitions, or accounting rules, specified in the System may become superfluous in certain circumstances (e.g., when there is no inflation), but it is nevertheless necessary for a general system such as the SNA to include definitions and rules covering as wide a range of circumstances as possible. |
| 1.30. | The fact that data needs and priorities, and also statistical capabilities, may vary considerably between different kinds of countries does not justify the construction of different systems with different concepts, definitions, classifications or accounting rules. Some countries may be able, at least initially, to calculate only a small number of accounts and tables for the total economy with little or no disaggregation into sectors, but a reduced set of accounts or tables does not constitute an alternative system. It is not appropriate to try to lay down general priorities for data collection when economic circumstances may vary so much from one country to another. In practice, priorities can only be established country by country by economic analysts or policy-makers familiar with the economic situation, needs and problems of the individual countries in question. It is not useful, for example, to try to specify general priorities for developing countries when they constitute a very heterogeneous group of countries at a world level. Data priorities may vary as much between one developing country and another as between a developing and a developed country. |
1. Specific uses
| 1.31. | The main objective of the SNA is to provide a comprehensive conceptual and accounting framework which can be used to create a macroeconomic database suitable for analysing and evaluating the performance of an economy. The existence of such a database is a prerequisite for informed, rational policy-making and decision-taking. Some of the more specific uses of the SNA are described in the following sections. |
Monitoring the behaviour of the economy
| 1.32. | National accounts data provide information covering both different types of economic activities and the different sectors of the economy. It is possible to monitor the movements of major economic flows such as production, household consumption, government consumption, capital formation, exports, imports, wages, profits, taxes, lending, borrowing, etc., the flows of goods and services being recorded at both current and constant prices. Moreover, information is provided about certain key balancing items and ratios which can only be defined and measured within an accounting framework - for example, the budget surplus or deficit, the share of income which is saved, or invested, by individual sectors of the economy or the economy as a whole, the trade balance, etc. National accounts also provide the background against which movements of short-term indicators, such as monthly indices of industrial production or of consumer or producer prices, can be interpreted and evaluated. The monitoring of the behaviour of the economy may be significantly improved if at least some of the main aggregates of the System are compiled quarterly as well as annually, although many of the accounts, tables or balance sheets of the System are not usually compiled more frequently than once a year. |
Macroeconomic analysis
| 1.33. | National accounts are also used to investigate the causal mechanisms at work within an economy. Such analysis usually takes the form of the estimation of the parameters of functional relationships between different economic variables by applying econometric methods to time series of data at both current and constant prices compiled within a national accounting framework. The types of macroeconomic models used for such investigations may vary according to the school of economic thought of the investigator as well as the objectives of the analysis, but the System is sufficiently flexible to accommodate the requirements of different economic theories or models, provided only that they accept the basic concepts of production, consumption, income, etc. on which the System is based. |
| 1.34. | Advances in computer technology have made it possible for the econometric analysis of large macroeconomic models to be carried out on microcomputers. Many econometric software packages have been developed for this purpose so that this kind of modelling is no longer confined to a few government departments, research institutes or universities with large mainframe computers. It is increasingly being undertaken by private corporations or institutions with only limited resources available for these purposes. |
Economic policy-making and decision-taking
| 1.35. | Economic policy in the short term is formulated on the basis of an assessment of the recent behaviour and current state of the economy and a view, or precise forecast, about likely future developments. Short-term forecasts are typically made using econometric models of the type just described. Over the medium or long term, economic policy has to be formulated in the context of a broad economic strategy which may need to be quantified in the form of a plan. Most of the elements which make up a medium- or long-term economic plan consist of national accounts flows, and it may be impossible to draw up such a plan without them. A good macroeconomic model which accurately reflects the past performance of the economy may be indispensable for planning as well as forecasting. |
| 1.36. | Economic policy-making and decision-taking take place at all levels of government and also within public and private corporations. Large corporations such as multinationals have the ability to build their own macroeconomic models tailored to their own requirements, for which they need national accounts data. The investment programmes of major corporations must be based on long-term expectations about future economic developments that require national accounts data. There are also, of course, specialist agencies that provide forecasts for individual clients in return for fees. Such agencies typically require very detailed national accounts data. |
International comparisons
| 1.37. | The SNA is the system used for reporting to international or supranational organizations national accounts data that conform to standard, internationally accepted concepts, definitions and classifications. The resulting data are widely used for international comparisons of the volumes of major aggregates, such as GDP or GDP per head, and also for comparisons of structural statistics, such as ratios of investment, taxes or government expenditures to GDP. Such comparisons are used by economists, journalists or other analysts to evaluate the performance of one economy against that of other similar economies. They can influence popular and political judgements about the relative success of economic programmes in the same way as developments over time within a single country. Databases consisting of sets of national accounts for groups of countries can also be used for econometric analyses in which time-series and cross-section data are pooled to provide a broader range of observations for the estimation of functional relationships. |
| 1.38. | Levels of GDP or, alternatively, gross national income (GNI) per head in different countries are also used by international organizations to determine eligibility for loans, aid or other funds or to determine the terms or conditions on which such loans, aid or funds are made available. When the objective is to compare the volumes of goods or services produced or consumed per head, data in national currencies must be converted into a common currency by means of purchasing power parities and not exchange rates. It is well known that, in general, neither market nor fixed exchange rates reflect the relative internal purchasing powers of different currencies. When exchange rates are used to convert GDP, or other statistics, into a common currency the prices at which goods and services in high-income countries are valued tend to be higher than in low-income countries, thus exaggerating the differences in real incomes between them. Exchange rate converted data must not, therefore, be interpreted as measures of the relative volumes of goods and services concerned. Levels of GDP, or GDP per head, in different countries are also used to determine, in whole or in part, the size of the contributions which the member countries of an international organization make to finance the operations of the organization. |
| 1.39. | Although international organizations use the SNA in order to be able to collect internationally comparable national accounts data, the SNA has not been created for this purpose. It has become the standard, or universal, system used with little or no modification by most countries in the world for their own national purposes. National statistical offices and government agencies have a strong vested interest in ensuring that the SNA meets their own analytic and policy requirements and have taken an active part in the development of the System for this reason. |
2. Flexibility of implementation and use
| 1.40. | The SNA is designed to be sufficiently comprehensive that individual countries, whatever their economic structures, institutional arrangements or level of development, can select from within it those parts of the System which are considered to be most relevant and useful to implement in the light of their own needs and capabilities. The SNA is meant to be implemented in a flexible manner and the accounts and tables, classifications and sectoring presented in this volume should not be regarded as fixed. In some cases, the System explicitly insists on flexibility. For example, two alternative methods of sub-sectoring the general government sector are proposed in chapter IV without either being assigned priority. Similarly, although the System suggests sub-sectoring the households sector on the basis of the household's principal source of income, it stresses that this is only one possible criterion for sub-sectoring. In some cases, it may be more appropriate to sub-sector on the basis of socio-economic criteria or the type of area in which the household is located or, indeed, to carry the disaggregation of the households sector further by using two or more criteria together in a hierarchical manner. |
| 1.41. | Ways in which the System may be adapted to meet differing circumstances and needs are specifically addressed in chapter XIX. For example, classifications of institutional units, transactions and assets may be implemented flexibly in order to adapt them to the data availability and special circumstances of different countries. The flexible use of classifications does not change the basic concepts and definitions of the System. However, as explained in chapter XXI, flexibility may be taken a stage further by developing satellite accounts that are closely linked to the main System but are not bound to employ exactly the same concepts or restricted to data expressed in monetary terms. Satellite accounts are intended for special purposes such as monitoring the community's health or the state of environment. They may also be used to explore new methodologies and to work out new accounting procedures that, when fully developed and accepted, may become absorbed into the main System in the course of time, in the way that input-output analysis, for example, has been integrated into the System. |
| 1.42. | Another way in which the System may be implemented flexibly is by rearranging the data in the accounts in the form of a social accounting matrix in order better to serve particular analytical and policy needs. Such matrices should not be construed as constituting different systems but as alternative ways of presenting the mass of information contained in the System which many users and analysts find more informative and powerful for both monitoring and modelling social and economic development. |
3. The SNA as a coordinating framework for statistics
| 1.43. | The System also has a very important statistical function by serving as a coordinating framework for economic statistics in two different senses: first, as the conceptual framework for ensuring the consistency of the definitions and classifications used in different, but related, fields of statistics, and secondly, as an accounting framework for ensuring the numerical consistency of data drawn from different sources, such as industrial inquiries, household surveys, merchandise trade statistics, VAT returns and other administrative sources. |
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