2008 SNA

United States To Adopt The 2008 SNA

22 April 2013

There are two interesting articles in the Financial Times today: Data shift to lift US economy 3% and US economy gets a Hollywood makeover According to the first article, The revision, equivalent to adding a country as big as Belgium to the estimated size of the world economy, will make the US one of the first adopters [...]

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Random Tidbits On National Accounts And Keynesian Models Of Income And Expenditure

13 December 2012

I came across this article (via a Tweet from Stephen Kinsella): Accounting As The Master Metaphor Of Economics by Arjo Klamer and Donald McCloskey which discusses how the framework of national accounts has been pushed to the background in economic analysis over the years. It is a nice read – although boring in a few places. I [...]

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A Quiz On National Accounts: Answers

15 July 2012

In my previous post, I had the following questions: Can government expenditure be greater than 100% of gdp? Can Gross Fixed Capital Formation of an economy as a whole be negative? The answer to both is yes. Commenters guessed the right answer and provided the example I was looking for (except the fourth below). Here [...]

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A Quiz On National Accounts

12 July 2012

In the following video, CNBC irritates Paul Krugman to argue against government spending which provoked Krugman to write a blog post Zombies On CNBC Krugman is asked – how high can government expenditure go – 100%? Okay two theoretical questions which are purely theoretical – nothing much to do with the discussion above. Can government [...]

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Balance Of Payments: Part 2 – Double Versus Quadruple Entry Bookkeeping

20 May 2012

Some time back I had started with the first part of a series of posts on this topic: see Balance Of Payments: Part 1. From the same post, here’s from the Australian Bureau of Statistics’ manual Balance of Payments and International Investment Position, Australia, Concepts, Sources and Methods, 1998 (click to enlarge) So we have the current account, the [...]

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More National Accounts: Consumption Of Fixed Capital

29 March 2012

In one of my recent posts, Saving Net Of Investment, I went into gross saving versus saving net of consumption of fixed capital. I showed how depreciation – or more appropriately, consumption of fixed capital – is treated in the flow of funds accounts. Since the transactions flow matrix is a powerful tool for visualizing [...]

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Kalecki’s Profit Equation

12 March 2012

In my post The Transactions Flow Matrix, I went into how a full transactions flow matrix can be constructed using a simplified national income matrix. Let us reanalyze the latter. The following is the same matrix with some modifications – firms retain earnings and there are interest payments. FU is the undistributed profits of firms. [...]

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Deutsche Bundesbank’s TARGET2 Claims

5 March 2012

Yesterday Wolfgang Münchau wrote an article in the Financial Times The Bundesbank has no right at all to be baffled in which he gave his opinion about Bundesbank President Jens Weidmann’s leaked letter to the European Central Bank President  Mario Draghi expressing concerns on the Bundesbank’s TARGET2 assets. According to the Bundesbank December 2011 Monthly Report, its claims on [...]

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Net Worth: Part 2

16 February 2012

A commenter on my post on Net Worth asked me if I could do an example. Here it goes. First I do it as done by national accountants as per 2008 SNA - the System of National Accounts and then by the method used by the Federal Reserve’s Z.1 Flow of Funds Accounts. The example is from a [...]

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Income And Expenditure Flows And Financing Flows

13 February 2012

In the previous two posts, I went into a description of the transactions flow matrix and the balance sheet matrix as tools for an analytic study of a dynamical study of an economy. During an accounting period, sectors in an economy are making all kinds of transactions. These can be divided into two kinds: Income [...]

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