Printer Friendly

A preview of the comprehensive revision of the national income and product accounts: new and redesigned tables.

A Preview of the Comprehensive Revision of the National Income and Product Accounts: New and Redesigned Tables

In December, the Bureau of Economic Analysis (BEA) will release the results of a comprehensive--that is, benchmark--revision of the national income and product accounts (NIPA's). This revision is the ninth of its kind; the last such revision was released in December 1985.

Comprehensive revisions differ from annual NIPA revisions because of the scope of the changes incorporated and because of the number of years subject to revision. Comprehensive revisions incorporate three kinds of changes: Definitional and classificational changes, statistical changes, and new and redesigned tables.

Definitional and classificational changes update the accounts to reflect the evolving U.S. economy; they are usually made in a comprehensive revision so that the estimates can be revised back to produce consistent time series. In the upcoming comprehensive revision, the definitional and classificational changes will mainly represent efforts to deal with the effects of the changing nature of government programs, the increasing importance of international transactions, and the nature of business incomes and expenses as they affect current production.

Statistical changes update the estimates to reflect the incorporation of newly available and revised data from regularly used sources and new methodologies--that is, new source data and new estimating procedures. In the upcoming revision, data will be incorporated from sources such as the 1982 benchmark input-output tables, the 1987 Economic Censuses, and several annual surveys for 1989 and 1990; several new methodologies will be introduced to cope with difficult measurement problems and to reflect changes in the availability and quality of source data. In addition, the base period for the calculation of constant-dollar estimates and of the associated price indexes will be shifted from 1982 to 1987, and the industry distributions of GNP and its components for 1987 forward will be shifted from the 1972 to the 1987 Standard Industrial Classification.

New and redesigned tables update the presentation of the NIPA's to reflect the definitional, classificational, and statistical changes and to make the tables more informative. In the upcoming revision, the most important changes will entail a focus on gross domestic product (GDP), the appropriate measure of U.S. production for many types of analysis, and the presentation of alternatives to the standard constant-dollar measures and related fixed-weighted price indexes.

This article describes the new and redesigned tables that will update the presentation of the NIPA's. An article in last month's Survey of Current Business described the definitional and classificational changes that will be incorporated in the revision.(1) Subsequent articles will discuss statistical changes and other aspects of the revision.

Table 1 provides a complete list of the revised set of NIPA tables arranged according to the new table numbers. The table cross-references the new table numbers with the old ones, identifies the new tables, and shows, at the end of the list, the presently published tables that will be deleted. The last column in table 1 identifies the major changes to each table. These changes result from the focus on GDP, the introduction of alternatives to the standard constant-dollar measures and related price indexes, the definitional and classificational changes, and the incorporation of the 1987 Standard Industrial Classification (SIC).

The focus on GDP

As announced in the August 1991 Survey, GDP will replace GNP as the featured aggregate in most NIPA tables, with the components of these tables adjusted accordingly.(2) The focus on GDP will affect the five summary accounts of the NIPA's, as shown in table 2.(3) The effects on the first of these accounts, the national income and product--or production--account are the following.

* GDP replaces GNP as the sum of

expenditures (the product side of

the account) and of incomes (the

income side of the account).

* On the product side, net exports

of goods and services is redefined

to exclude net receipts of factor

income from the rest of the world.

(This change also affects account 4,

the foreign transactions account.)

* On the income side, net receipts

of factor income is added as a

negative entry to convert GNP to

GDP.

Table 1 identifies the NIPA tables in which GDP will replace GNP as the production aggregate and the components affected by the replacement. Two of the most important changes relate to net exports of goods and services and to final sales. As previously noted, net exports of goods and services is redefined to exclude net receipts of factor incomes. (Exports is redefined to exclude receipts of factor income, and imports is redefined to exclude payments of factor income.) Final sales is now defined as the final sales of national product, or GNP less change in business inventories; it will be replaced by final sales of domestic product, or GDP less change in business inventories.

Alternative measures of constant-dollar estimates and related price indexes

Another important feature of the upcoming revision will be the introduction of quantity and price indexes that represent alternatives to the standard constant-dollar measures and related fixed-weighted price indexes. BEA has selected as alternatives two types of indexes, both of which are based on the Fisher ideal index formula and were among the alternatives discussed in an April 1989 Survey article.(4) One of the alternatives is a chain-type index that will use as weights the composition of output for the preceding and current years. The other alternative index will use as weights the composition of output for benchmark years. An article in the January 1992 Survey will describe the alternative measures in more detail and provide estimates for 1959 to the third quarter of 1991; estimates for the fourth quarter will be provided in the February Survey.

In the redesigned tables, the alternative quantity and price indexes will be presented using the format shown below. This format also includes, for the first time in the NIPA tables, the presentation of the current- and constant-dollar measures as indexes (on a base of 1987=100) to facilitate comparisons with the alternative measures. Alternative quantity and price indexes will be shown for GDP and its major expenditure components (table 7.1), for measures of final sales and purchases (table 7.2), and for GNP (table 7.3).

NIPA series name:

Current dollars

Quantity indexes:

Fixed 1987 weights

Alternative indexes:

Chain-type annual weights

Benchmark-years weights

Price indexes:

Fixed 1987 weights

Alternative indexes:

Chain-type annual weights

Benchmark-years weights

Implicit price deflator

Definitional and classificational changes

Many of the NIPA tables will be revised and some new ones added as a result of the definitional and classificational changes that will be incorporated in the upcoming revision. For example, the change that redefines government sales and personal nontaxes results in the deletion of the reclassified nontaxes from the table that shows personal nontaxes (table 3.4), the addition of this detail to a new table that shows government sales (table 3.9), and changes in the presentation of certain components of personal consumption expenditures (tables 2.4--2.7). Some of the definitional and classificational changes will not affect the structure of the NIPA tables. An example is the change that recognized personal injury trusts, which will affect only the estimates for existing components.

The effects of several definitional and classificational changes are also evident in the revised summary accounts shown in table 2. On the income side of the national income and product account, recording nonresident taxes as transfers results in a new type of business transfer payment--payments to the rest of the world (line 19). In the personal income and outlay account, "interest paid by persons" replaces "interest paid by consumers to business" to reflect the recognition of interest paid by persons to government (lines 4 and 17). In the foreign transactions account, the reclassification of interest paid by the Federal Government to foreigners results in the deletion of the line "interest paid by government to foreigners" in the present accounts; this interest will be included in the new line on payments of factor income (line 4).

Incorporation of the 1987 SIC

In the upcoming revision, the industry distributions of GDP, national income, and their components will be shifted, beginning with estimates for 1987, from the 1972 SIC to the 1987 SIC because most of the NIPA source data has shifted to the 1987 SIC. Estimates for earlier years, which are now based on either the 1942 or 1972 SIC, will not be shifted because of a lack of adequate source data. Because the 1987 SIC created significant discontinuities at the level of industry detail used in the NIPA's, primarily in manufacturing and finance industries, estimates for 1987 will be shown on the basis of both the 1972 and the 1987 SIC.(5) In addition, the incorporation of the 1987 SIC resulted in changes in the names of several industries.

The industry distributions in most of the redesigned NIPA tables will be presented as follows: Estimates for 1929 to 1948, based on the 1942 SIC, will be shown in tables designated as part A; estimates for 1948 to 1987, based on the 1972 SIC, will be shown as part B; and estimates for 1987 forward, based on the 1987 SIC, will be shown as part C.(6) Some series do not go back to 1929; tables presenting these series will have only a part A, based on the 1972 SIC, and a part B, based on the 1987 SIC. Footnotes to these tables have been added to clarify the A, B, and C designations for each table.

Series names

The names of several NIPA series will be changed. Because these changes affect many tables, they are not mentioned in table 1; instead, the new and old names for these series are listed below:
 New series name Old series name
Consumption of fixed Capital consumption
 capital allowances with
 capital consumption
 adjustment
Government purchases Government purchases of
 goods and services
Gross national income Charges against gross
 national product
Government Government and
 government enterprises
General government Government


In addition, the term "foreigners" has been replaced by "rest of the world" or "nonresidents" in the names of many NIPA series. For example, "transfer payments to the rest of the world" replaces "transfer payments to foreigners (net)." Note.--Virginia Mannering and Heather Quick provided assistance in compiling the table changes; Getty Mumford provided secretarial assistance. [Table 1 and 2 Omitted]

(1)See Robert P. Parker, "A Preview of the Comprehensive Revision of the National Income and Product Accounts: Definitional and Classificational Changes," Survey of Current Business 71 (September 1991): 23-31. (2)For a discussion of the differences between GNP and GDP, see "Gross Domestic Product as a Measure of U.S. Production," Survey 71 (August 1991): 8. (3)For a discussion of the present accounts, see Allan H. Young and Helen Stone Tice, "An Introduction to National Economic Accounting," Survey 65 (March 1985): 69-70. (4)See Allan H. Young, "Alternative Measures of Real GNP," Survey 69 (April 1989): 27-34. (5)For a detailed presentation of the 1987 SIC revisions, see Standard Industrial Classification Manual, 1987, Executive Office of the President, Office of Management and Budget (Washington, DC: U.S. Government Printing Office, 1988). (6)Tables 5.10 to 5.13 show inventory estimates by SIC industry division beginning in 1946. Because the differences in the 1972 SIC and 1987 SIC are minor at the industry division level, the estimates for 1987 forward will be based only on the 1987 SIC.
COPYRIGHT 1991 U.S. Government Printing Office
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Parker, Robert P.
Publication:Survey of Current Business
Date:Oct 1, 1991
Words:1892
Previous Article:National income and product accounts.
Next Article:U.S. direct investment abroad: 1989 benchmark surveys results.
Topics:


Related Articles
National income and product accounts: selected NIPA tables, selected annual NIPA tables and NIPA charts.
National income and product accounts: selected NIPA tables.
Preview of the Comprehensive Revision of the National Income and Product Accounts: new and redesigned tables.
Gross domestic product: third quarter 1995 (preliminary). Corporate profits: third quarter 1995 (preliminary). Revised estimates, 1959-95.
National income and product accounts.
A look at how BEA presents the national income and product accounts.
Appendix Suggested Reading.
Annual Revision of the National Income and Product Accounts.
Improved Estimates of the National Income and Product Accounts for 1929-99: Results of the Comprehensive Revision.
Annual Revision of the National Income and Product Accounts.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters