The 2008 SNA - concepts in brief

A complement to the System of National Accounts 2008

World Bank

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Table of contentsPreface ....................................................................................................................................................................................xv

List of abbreviations and acronyms ..................................................................................................................................xvii

Chapter 1: Introduction ............................................................................................................................................................1A. What is the System of National Accounts? ..........................................................................................................1

B. The conceptual elements of the SNA ..................................................................................................................21. Activities and transactions ...................................................................................................................... 22. The institutional sectors of the economy .................................................................................................23. Accounts and their corresponding economic activities............................................................................3

C. Uses of the SNA ..................................................................................................................................................31. Monitoring the behaviour of the economy.............................................................................................. 32. Macroeconomic analysis..........................................................................................................................3

D. The boundaries of the SNA..................................................................................................................................31. Non-monetary transactions ..................................................................................................................... 32. The production boundary .........................................................................................................................3

Household production............................................................................................................................................... 4Other production boundary problems....................................................................................................................... 4

3. The consumption boundary......................................................................................................................44. The asset boundary...................................................................................................................................45. National boundaries .................................................................................................................................4

E. The SNA as a coordinating framework for statistics ............................................................................................51. Harmonization between different statistical systems.............................................................................. 52. The use of microdata for macroeconomic accounting .............................................................................5

F. Links with business accounting ...........................................................................................................................51. International accounting standards.......................................................................................................... 6

G. Expanding the scope of the SNA .........................................................................................................................6

H. The SNA and measures of welfare ......................................................................................................................6

Chapter 2: Overview.................................................................................................................................................................7A. Introduction ..........................................................................................................................................................7

1. Analysing flows and stocks......................................................................................................................72. Recording flows and stocks .....................................................................................................................8

B. The conceptual elements of the SNA ..................................................................................................................91. Institutional units and sectors.................................................................................................................. 9

Institutional sectors ................................................................................................................................................... 9Delimitation of the total economy and the rest of the world .................................................................................... 9

2. Transactions and other flows .................................................................................................................10Main types of transactions and other flows ............................................................................................................ 10Characteristics of transactions in the SNA ............................................................................................................. 11

3. Assets and liabilities...............................................................................................................................114. Products and producing units ................................................................................................................11

Products .................................................................................................................................................................. 11Producing units ....................................................................................................................................................... 11

5. Purposes .................................................................................................................................................12C. Rules of accounting ...........................................................................................................................................12

1. Introduction ........................................................................................................................................... 12Terminology for the two sides of the accounts....................................................................................................... 12Change of ownership and the recording of transactions in goods and services ..................................................... 12Double entry or quadruple entry accounting .......................................................................................................... 13

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2. Time of recording...................................................................................................................................133. Valuation ................................................................................................................................................14

General principles .................................................................................................................................................. 14Methods of valuation ............................................................................................................................................. 14Volume measures and measures in real terms ....................................................................................................... 14

4. Consolidation and netting.......................................................................................................................15Consolidation ......................................................................................................................................................... 15Netting.................................................................................................................................................................... 15

D. The accounts......................................................................................................................................................151. Introduction ............................................................................................................................................152. The full sequence of accounts ................................................................................................................16

The three sections of the sequence of accounts ..................................................................................................... 16The production account ......................................................................................................................................... 16The distribution of income accounts...................................................................................................................... 17The accumulation accounts.................................................................................................................................... 18Balance sheets ....................................................................................................................................................... 20The rest of the world accounts ............................................................................................................................... 20The goods and services account............................................................................................................................. 21The aggregates ....................................................................................................................................................... 21

Chapter 3: Stocks, flows and accounting rules ...................................................................................................................25A. Introduction ........................................................................................................................................................25

1. Stocks and flows.................................................................................................................................... 252. Balancing items ......................................................................................................................................253. Grouping stocks and flows into accounts...............................................................................................264. Accounting rules ....................................................................................................................................26

B. Stocks ................................................................................................................................................................261. Benefits.................................................................................................................................................. 262. Ownership ..............................................................................................................................................273. The definition of an asset .......................................................................................................................274. Financial assets and liabilities ................................................................................................................275. The asset boundary and the first-level classification of assets...............................................................286. Entry and exit of assets from the balance sheet .....................................................................................287. Exclusions from the asset boundary.......................................................................................................28

C. Flows..................................................................................................................................................................291. Transactions .......................................................................................................................................... 29

Monetary transactions............................................................................................................................................ 29Non-monetary transactions .................................................................................................................................... 30Externalities and illegal actions ............................................................................................................................. 30

1. Other flows............................................................................................................................................ 31Other changes in the volume of assets................................................................................................................... 31Holding gains and losses........................................................................................................................................ 31

D. Balancing items .................................................................................................................................................31Balancing items in the flow accounts ................................................................................................................... 31Balancing items in the balance sheets.................................................................................................................... 32

E. Accounting rules.................................................................................................................................................321. Quadruple-entry accounting.................................................................................................................. 322. Valuation ................................................................................................................................................33

General rules .......................................................................................................................................................... 33Valuation of transactions ...................................................................................................................................... 33

3. Time of recording...................................................................................................................................33Choice of time of recording ................................................................................................................................... 33Choice for recording on an accrual basis............................................................................................................... 34Time of recording of acquisitions of goods and services ...................................................................................... 34Time of recording of redistributive transactions.................................................................................................... 34

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Time of recording of transactions in financial assets and liabilities....................................................................... 34Time of recording of output and intermediate consumption .................................................................................. 34Time of recording of changes in inventories and consumption of fixed capital .................................................... 34Time of recording of composite transactions and balancing items ........................................................................ 34Time of recording of other flows............................................................................................................................ 35Time of recording of holding gains and losses....................................................................................................... 35Balance sheet items................................................................................................................................................. 35

4. Aggregation, netting, consolidation .......................................................................................................35Aggregation ............................................................................................................................................................ 35Netting .................................................................................................................................................................... 35Consolidation.......................................................................................................................................................... 35

Chapter 4: Institutional units and sectors............................................................................................................................37A. Introduction ........................................................................................................................................................37

1. Institutional units................................................................................................................................... 372. Residence ...............................................................................................................................................383. Sectoring and economic behaviour ........................................................................................................384. The total economy .................................................................................................................................395. An overview of institutional sectors ......................................................................................................396. Subsectors ..............................................................................................................................................41

Public and foreign control ...................................................................................................................................... 41Non-profit institutions ............................................................................................................................................ 41Other subsectoring .................................................................................................................................................. 41

7. The rest of the world .............................................................................................................................41B. Corporations in the SNA ....................................................................................................................................41

1. Types of corporations.............................................................................................................................41Legally constituted corporations............................................................................................................................. 41Cooperatives, limited liability partnerships, etc. .................................................................................................... 42Quasi-corporations.................................................................................................................................................. 42Notional resident units............................................................................................................................................ 43

C. Non-profit institutions .........................................................................................................................................431. The characteristics of NPIs ................................................................................................................... 432. NPIs engaged in market production.......................................................................................................44

Market NPIs serving enterprises............................................................................................................................. 443. NPIs engaged in non-market production ...............................................................................................44

Government control of non-profit institutions........................................................................................................ 44NPIs serving households (NPISHs)........................................................................................................................ 44

D. The non-financial corporations sector and its subsectors..................................................................................44

E. The financial corporations sector and its subsectors .........................................................................................45

F. The general government sector and its subsectors ...........................................................................................461. Government units as institutional units..................................................................................................46

Government units as producers .............................................................................................................................. 46Social security schemes and social security funds ................................................................................................. 47

2. The general government sector .............................................................................................................473. Subsectors of the general government sector.........................................................................................47

G. The households sector and its subsectors.........................................................................................................481. Households as institutional units............................................................................................................482. Unincorporated enterprises within households ......................................................................................483. The household sector and its subsectors ...............................................................................................49

H. The non-profit institutions serving households sector ........................................................................................49

I. The rest of the world .........................................................................................................................................501. International organizations.....................................................................................................................502. Central banks of currency unions...........................................................................................................50

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Chapter 5: Enterprises, establishments and industries......................................................................................................51A. Introduction ........................................................................................................................................................51

B. Productive activities ...........................................................................................................................................511. The classification of activities in the SNA............................................................................................ 522. Principal and secondary activities ..........................................................................................................52

Principal activities.................................................................................................................................................. 52Secondary activities ............................................................................................................................................... 52

3. Ancillary activities .................................................................................................................................52C. Partitioning enterprises into more homogeneous units ......................................................................................52

1. Types of production units...................................................................................................................... 52Kind-of-activity units............................................................................................................................................. 52Local units.............................................................................................................................................................. 52Establishments ....................................................................................................................................................... 53

2. Data and accounts for establishments ....................................................................................................533. Application of the principles in specific situations ................................................................................53

Establishments owned by general government...................................................................................................... 53

D. Ancillary activities...............................................................................................................................................53The role of ancillary activities in the SNA ............................................................................................................ 54

E. Industries............................................................................................................................................................541. Market, own account and non-market producers .................................................................................. 542. Industries and products...........................................................................................................................54

Chapter 6: The production account ......................................................................................................................................57A. Introduction ........................................................................................................................................................57

B. The concept of production..................................................................................................................................571. Production as an economic activity....................................................................................................... 57

Goods ..................................................................................................................................................................... 58Services .................................................................................................................................................................. 58Knowledge-capturing products.............................................................................................................................. 58

2. The production boundary .......................................................................................................................59The general production boundary .......................................................................................................................... 59The production boundary in the SNA.................................................................................................................... 59The production boundary within households......................................................................................................... 59

C. Basic, producers’ and purchasers’ prices ..........................................................................................................601. Basic and producers’ prices................................................................................................................... 612. Purchasers’ prices...................................................................................................................................623. Basic, producers’ and purchasers’ prices – a summary .........................................................................62

D. Value added and GDP ......................................................................................................................................621. Gross and net value added..................................................................................................................... 623. Gross domestic product (GDP) ..............................................................................................................634. Domestic production ..............................................................................................................................63

E. The measurement of output ..............................................................................................................................641. Production versus output....................................................................................................................... 642. Time of recording...................................................................................................................................643. Valuation of output.................................................................................................................................654. Market output, output for own final use and non-market output ...........................................................65

Market output ........................................................................................................................................................ 65Output for own final use ....................................................................................................................................... 66Non-market output ................................................................................................................................................ 66Market and non-market producers ......................................................................................................................... 66

F. The output of particular industries......................................................................................................................671. Introduction ........................................................................................................................................... 672. Agriculture, forestry and fishing ............................................................................................................67

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3. Machinery, equipment and construction ................................................................................................674. Transportation and storage.....................................................................................................................67

Transportation......................................................................................................................................................... 67Storage .................................................................................................................................................................... 67

5. Wholesale and retail distribution ...........................................................................................................686. Output of the central bank......................................................................................................................69

Provision of market output ..................................................................................................................................... 697. Financial services other than those associated with insurance and pension funds ................................69

Financial services provided in return for explicit charges...................................................................................... 69Financial services provided in association with interest charges on loans and deposits ........................................ 70Financial services associated with the acquisition and disposal of financial assets and liabilities in financial markets

708. Financial services associated with insurance and pension schemes. .....................................................70

Non-life insurance .................................................................................................................................................. 71Life insurance ......................................................................................................................................................... 71

G. Intermediate consumption .................................................................................................................................721. Coverage of intermediate consumption ................................................................................................ 722. The timing and valuation of intermediate consumption ........................................................................725. Services provided by government to producers .....................................................................................736. Social transfers in kind...........................................................................................................................737. Services of business associations ...........................................................................................................738. Outsourcing ............................................................................................................................................739. Leasing fixed assets ...............................................................................................................................73

H. Consumption of fixed capital .............................................................................................................................731. The coverage of consumption of fixed capital .......................................................................................733. The calculation of consumption of fixed capital....................................................................................744. The perpetual inventory method ............................................................................................................74

Calculation of the gross capital stock ..................................................................................................................... 75Relative efficiencies ............................................................................................................................................... 75Rates of consumption of fixed capital .................................................................................................................... 75Values of consumption of fixed capital .................................................................................................................. 75

Chapter 7: The distribution of income accounts .................................................................................................................77A. Introduction ........................................................................................................................................................77

1. The generation of income account ........................................................................................................ 77Operating surplus and mixed income ..................................................................................................................... 78

2. The allocation of primary income account ............................................................................................79The balancing items and national income ............................................................................................................. 80Net national income and gross national income ..................................................................................................... 80

B. Compensation of employees ............................................................................................................................811. Identifying employees........................................................................................................................... 81

The employment relationship ................................................................................................................................. 812. The components of compensation of employees ...................................................................................83

Wages and salaries ................................................................................................................................................. 83Employers’ social contributions ............................................................................................................................ 84

C. Taxes on production and on imports .................................................................................................................841. Recording of taxes on production and on imports ................................................................................ 84

The recording of taxes on production and on imports in the accounts ................................................................... 85Taxes versus fees .................................................................................................................................................... 85Taxes and subsidies within the primary distribution of income accounts .............................................................. 86

2. Taxes on products .................................................................................................................................86Value added type taxes .......................................................................................................................................... 86Taxes and duties on imports, excluding VAT ....................................................................................................... 86Export taxes ........................................................................................................................................................... 86Taxes on products, excluding VAT, import and export taxes ............................................................................... 86

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3. Other taxes on production .....................................................................................................................86D. Subsidies ...........................................................................................................................................................87

1. Subsidies on products ........................................................................................................................... 87Import subsidies .................................................................................................................................................... 87Export subsidies .................................................................................................................................................... 87Other subsidies on products .................................................................................................................................. 87

2. Other subsidies on production ...............................................................................................................87E. Property incomes ..............................................................................................................................................87

1. Defining property income ..................................................................................................................... 872. Interest ...................................................................................................................................................88

The accrual basis of recording ............................................................................................................................... 88Interest payable and receivable on loans and deposits........................................................................................... 88

3. Distributed income of corporations .......................................................................................................89Dividends .............................................................................................................................................................. 89Withdrawals of income from quasi-corporations ................................................................................................. 89Reinvested earnings on foreign direct investment ................................................................................................ 90

5. Rent .......................................................................................................................................................90Rent distinguished from rentals ............................................................................................................................. 90Rent on natural resources....................................................................................................................................... 90Rent on land ........................................................................................................................................................... 90Rent on subsoil assets ............................................................................................................................................ 91

Chapter 8: The redistribution of income accounts..............................................................................................................93A. Introduction ........................................................................................................................................................93

1. The secondary distribution of income account ..................................................................................... 93Current taxes on income, wealth, etc. .................................................................................................................... 94Social contributions and benefits .......................................................................................................................... 94Other current transfers .......................................................................................................................................... 95

2. Disposable income ................................................................................................................................95National disposable income ................................................................................................................................... 95

B. Current transfers ...............................................................................................................................................961. The distinction between current and capital transfers........................................................................... 962. The recording of transfers ......................................................................................................................96

Transfers in cash .................................................................................................................................................... 97Provisions of goods and services by enterprises.................................................................................................... 97

C. Current taxes on income, wealth, etc. ...............................................................................................................971. Taxes in general .................................................................................................................................... 97

Taxes versus fees ................................................................................................................................................... 982. Taxes on income ....................................................................................................................................983. Other current taxes ................................................................................................................................98

Current taxes on capital ......................................................................................................................................... 98Miscellaneous current taxes................................................................................................................................... 98

G. Other current transfers ......................................................................................................................................991. Insurance-related transactions ............................................................................................................... 99

Net non-life insurance premiums .......................................................................................................................... 99Non-life insurance claims ................................................................................................................................... 100Net reinsurance premiums and claims ................................................................................................................. 100Fees and calls under standardized guarantees...................................................................................................... 100

2. Current transfers within general government ......................................................................................1003. Current international cooperation ........................................................................................................1004. Miscellaneous current transfers ...........................................................................................................101

Current transfers between the central bank and general government .................................................................. 101Current transfers to NPISHs ................................................................................................................................ 101Current transfers between households ................................................................................................................. 101Fines and penalties............................................................................................................................................... 101Lotteries and gambling ........................................................................................................................................ 101

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Payments of compensation ................................................................................................................................... 102

Chapter 9: The use of income accounts.............................................................................................................................103A. Introduction ......................................................................................................................................................103

1. The use of disposable income account................................................................................................ 1045. Saving ..................................................................................................................................................1046. Calculating savings ratios ....................................................................................................................105

B. Expenditures, acquisitions and consumption of goods and services...............................................................1051. Expenditures........................................................................................................................................ 105

The timing of expenditures on goods and services .............................................................................................. 1052. Acquisitions .........................................................................................................................................1063. Consumption of goods and services ....................................................................................................106

Durable versus non-durable goods ....................................................................................................................... 106Consumption as the using up of goods and services ............................................................................................ 106

C. Measuring the value of non-monetary transactions indirectly..........................................................................1061. Barter transactions............................................................................................................................... 1072. Expenditures on goods and services received as income in kind ........................................................1073. Expenditure on goods and services produced on own account............................................................107

D. Household final consumption expenditure ......................................................................................................1081. Introduction ......................................................................................................................................... 1082. Expenditures by households owning unincorporated enterprises ........................................................1083. Expenditures on particular types of goods and services ......................................................................108

Expenditures on financial services ....................................................................................................................... 108Services of dwellings, repairs and improvements ................................................................................................ 109The repair and maintenance of durables ............................................................................................................... 109Licences and fees.................................................................................................................................................. 109

4. Classification of household final consumption expenditure ................................................................1095. Timing and valuation of household final consumption expenditure....................................................110

Timing................................................................................................................................................................... 110Valuation............................................................................................................................................................... 110

6. Expenditures by resident and non-resident households .......................................................................110F. Consumption expenditures incurred by general government .........................................................................111

1. Expenditures on the outputs of market and non-market producers .................................................... 111Expenditures on the outputs of non-market producers ......................................................................................... 111Expenditures on consumption goods and services produced by market producers.............................................. 111Government output and final consumption expenditure ..................................................................................... 111

2. Expenditures on individual and collective goods and services ...........................................................111Individual goods and services .............................................................................................................................. 111Collective services ............................................................................................................................................... 112The classification of individual and collective government expenditures............................................................ 112Non-market services to enterprises....................................................................................................................... 112

I. Consumption expenditures incurred by NPISHs .............................................................................................112

Chapter 10: The capital account .........................................................................................................................................115A. Introduction ......................................................................................................................................................115

1. The definitions of ownership and assets ............................................................................................. 1152. Non-financial assets .............................................................................................................................115

Produced assets ..................................................................................................................................................... 115Non-produced assets ............................................................................................................................................. 116

3. The structure of the capital account .....................................................................................................117Saving ................................................................................................................................................................... 117Capital transfers .................................................................................................................................................... 117Changes in net worth due to saving and capital transfers..................................................................................... 117Acquisitions less disposals of non-financial assets .............................................................................................. 117

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Net lending........................................................................................................................................................... 118

B. Gross capital formation ....................................................................................................................................1181. Gross fixed capital formation.............................................................................................................. 118

The asset boundary .............................................................................................................................................. 118Time of recording ................................................................................................................................................ 121Ownership of assets ............................................................................................................................................. 121Valuation.............................................................................................................................................................. 121Transactions in fixed assets ................................................................................................................................. 122

2. Changes in inventories .........................................................................................................................128Storage and stocks of inventories ........................................................................................................................ 128Valuation.............................................................................................................................................................. 128Transactions in inventories .................................................................................................................................. 129Finished goods ..................................................................................................................................................... 130Military inventories.............................................................................................................................................. 130Goods for resale ................................................................................................................................................... 130

3. Acquisitions less disposals of valuables...............................................................................................131The asset boundary .............................................................................................................................................. 131Valuation.............................................................................................................................................................. 131Transactions in valuables..................................................................................................................................... 131

C. Consumption of fixed capital ............................................................................................................................1311. Costs of ownership transfer..................................................................................................................1322. Terminal costs ......................................................................................................................................132

D. Acquisitions less disposals of non-produced non-financial assets...................................................................1321. Natural resources................................................................................................................................. 132

The asset boundary .............................................................................................................................................. 132Ownership ............................................................................................................................................................ 133Valuation.............................................................................................................................................................. 134

2. Contracts, leases and licences ..............................................................................................................135The asset boundary .............................................................................................................................................. 135Types of assets included in contracts, leases and licences................................................................................... 135

3. Goodwill and marketing assets ............................................................................................................136E. Capital transfers ...............................................................................................................................................137

1. Capital versus current transfers ........................................................................................................... 1372. Transfers in cash and in kind................................................................................................................137

Valuation.............................................................................................................................................................. 1373. Capital taxes .........................................................................................................................................1374. Investment grants .................................................................................................................................1385. Other capital transfers ..........................................................................................................................138

Chapter 11: The financial account ......................................................................................................................................139A. Introduction ......................................................................................................................................................139

1. Financial assets and liabilities ............................................................................................................. 1392. Quadruple-entry accounting.................................................................................................................1393. Counterparts of non-financial transactions ..........................................................................................1404. Exchanges of financial assets and liabilities ........................................................................................1405. Net lending ...........................................................................................................................................1406. Contingencies ......................................................................................................................................141

B. Transactions in financial assets and liabilities .................................................................................................1411. The classification of financial assets and liabilities ............................................................................ 1412. Negotiability.........................................................................................................................................1423. Valuation of transactions......................................................................................................................1424. Time of recording.................................................................................................................................1425. Netting and consolidation.....................................................................................................................142

Netting.................................................................................................................................................................. 142Consolidation ....................................................................................................................................................... 142

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C. Recording of individual financial instruments...................................................................................................1431. Monetary gold and SDRs ................................................................................................................... 143

Monetary gold ...................................................................................................................................................... 143SDRs .................................................................................................................................................................... 143

2. Currency and deposits .........................................................................................................................143Currency .............................................................................................................................................................. 143Transferable deposits ........................................................................................................................................... 143Other deposits ...................................................................................................................................................... 144

3. Debt securities .....................................................................................................................................144Supplementary classifications of debt securities ................................................................................................. 144

4. Loans ...................................................................................................................................................144Supplementary classifications of loans................................................................................................................. 145

5. Equity and investment fund shares .....................................................................................................145Equity ................................................................................................................................................................... 145Investment fund shares or units ........................................................................................................................... 146

6. Insurance, pension and standardized guarantee schemes ....................................................................1467. Financial derivatives and employee stock options ..............................................................................146

Financial derivatives ............................................................................................................................................ 1468. Other accounts receivable or payable .................................................................................................1479. Memorandum items .............................................................................................................................147

Chapter 12: The other changes in assets accounts..........................................................................................................149A. Introduction ......................................................................................................................................................149

B. The other changes in the volume of assets account........................................................................................1491. Functions of the other changes in the volume of assets account ........................................................ 1492. Appearance and disappearance of assets other than by transactions ...................................................150

Economic recognition of produced assets ............................................................................................................ 150Entry of natural resources into the asset boundary .............................................................................................. 151Exit of natural resources from the asset boundary ............................................................................................... 152Appearance and disappearance of financial assets and liabilities ....................................................................... 152

3. The effect of external events on the value of assets.............................................................................153Catastrophic losses ............................................................................................................................................... 153Uncompensated seizures ...................................................................................................................................... 153Other changes in volume n.e.c. ............................................................................................................................ 153

4. Changes in classifications ...................................................................................................................154C. The revaluation account...................................................................................................................................154

1. Different holding gains and losses concepts ....................................................................................... 154Nominal holding gains ......................................................................................................................................... 155

2. Holding gains and losses on specific assets .........................................................................................156Fixed assets ........................................................................................................................................................... 156Inventories ............................................................................................................................................................ 157Valuables .............................................................................................................................................................. 157Financial assets and liabilities .............................................................................................................................. 157

Chapter 13: The balance sheet............................................................................................................................................159A. Introduction ......................................................................................................................................................159

1. Balance sheets ..................................................................................................................................... 1592. Asset accounts......................................................................................................................................1593. Structure of the balance sheet ..............................................................................................................1604. Structure of asset accounts ...................................................................................................................160

B. General principles of valuation.........................................................................................................................1611. Value observed in markets .................................................................................................................. 1612. Values obtained by accumulating and revaluing transactions .............................................................1613. Present value of future returns .............................................................................................................161

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4. Assets denominated in foreign currencies............................................................................................164

Chapter 14: The supply and use tables and goods and services account .....................................................................165A. Introduction ......................................................................................................................................................165

1. Product balances.................................................................................................................................. 1652. The goods and services account ...........................................................................................................1663. Supply and use tables ...........................................................................................................................1664. The industry dimension........................................................................................................................1665. A numerical example ...........................................................................................................................167

B. The supply table...............................................................................................................................................1671. Products and producing units .............................................................................................................. 1672. Accounting rules ..................................................................................................................................1683. Production ............................................................................................................................................1684. Imports .................................................................................................................................................168

Classification........................................................................................................................................................ 168Goods for processing ........................................................................................................................................... 168

5. Valuation ..............................................................................................................................................169Trade margins ...................................................................................................................................................... 170Transport margins ................................................................................................................................................ 171Taxes and subsidies on products.......................................................................................................................... 174

C. The use table ...................................................................................................................................................1751. The use of products by producing units .............................................................................................. 1752. The use of products for final consumption...........................................................................................1763. The use of products for capital formation ............................................................................................176

Gross fixed capital formation............................................................................................................................... 177Changes in inventories......................................................................................................................................... 177Valuables.............................................................................................................................................................. 178

4. Exports .................................................................................................................................................1785. Introducing value added .......................................................................................................................1786. Expanding value added ........................................................................................................................1797. Adding other variables .........................................................................................................................179

E. Numerical example ..........................................................................................................................................1791. The full supply and use table............................................................................................................... 1792. Margins and taxes.................................................................................................................................179

Chapter 15: Price and volume measures............................................................................................................................183A. Introduction ......................................................................................................................................................183

1. Index number theory ........................................................................................................................... 1832. Inter-temporal price and volume series................................................................................................1833. International price comparisons ...........................................................................................................1844. Further information ..............................................................................................................................184

B. An overview of index number theory ...............................................................................................................1841. Quantities, prices and values............................................................................................................... 184

Additivity of quantities, prices and values........................................................................................................... 184Volume, quantity, price and unit value indices.................................................................................................... 184

2. Inter-temporal index numbers of prices and volumes..........................................................................185Laspeyres and Paasche indices ............................................................................................................................ 185

3. Chain indices ........................................................................................................................................186The rebasing and linking of indices ..................................................................................................................... 186Variables that change sign ................................................................................................................................... 186

4. Causes of price variation .....................................................................................................................187Price variation due to quality differences ............................................................................................................ 187Price variation without quality differences .......................................................................................................... 187Price discrimination ............................................................................................................................................. 187

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The existence of parallel markets ......................................................................................................................... 1885. The measurement of changes in quality over time ..............................................................................188

Direct methods...................................................................................................................................................... 188Indirect methods ................................................................................................................................................... 189Rapidly changing differentiated product markets................................................................................................. 189Further elaboration................................................................................................................................................ 190

6. Practical advantages of compiling chain indices .................................................................................190D. Measures of real income for the total economy ...............................................................................................191

1. The concept of real income................................................................................................................. 1912. Trading gains and losses from changes in the terms of trade ..............................................................1913. The interrelationship between volume measures of GDP and real income aggregates .......................192

E. International price and volume comparisons ...................................................................................................1931. Introduction ..........................................................................................................................................1932. Index number issues.............................................................................................................................193

Representativity versus comparability.................................................................................................................. 194Aggregation .......................................................................................................................................................... 194

3. Practical considerations for national accountants ................................................................................194PPPs and the national accounts............................................................................................................................. 194Why ICP growth rates differ from national growth rates ..................................................................................... 195 Non-market services ............................................................................................................................................ 196Conclusion ............................................................................................................................................................ 196

Chapter 16: Summarizing and integrating the accounts ..................................................................................................197A. Introduction ......................................................................................................................................................197

B. Integrating the accounts...................................................................................................................................1971. Summarizing the current accounts ...................................................................................................... 197

The production account ........................................................................................................................................ 197The generation of income account........................................................................................................................ 197The allocation of primary income account ........................................................................................................... 197The secondary distribution of income account ..................................................................................................... 200The use of income accounts.................................................................................................................................. 200

2. Summarizing the accumulation accounts.............................................................................................200The capital account ............................................................................................................................................... 200The financial account............................................................................................................................................ 201

3. The goods and services account...........................................................................................................2014. The accounts for the rest of the world..................................................................................................2015. Integration of stock and flow data........................................................................................................201

Linking the opening and closing balance sheets................................................................................................... 201Net worth .............................................................................................................................................................. 203Asset accounts ...................................................................................................................................................... 203

6. Consolidating the accounts ..................................................................................................................203C. The macroeconomic aggregates in the SNA ...................................................................................................204

1. The GDP identities.............................................................................................................................. 2042. A note on the valuation of output.........................................................................................................2053. Gross and net domestic product ...........................................................................................................2054. Gross and net national income .............................................................................................................2055. National disposable income .................................................................................................................206

D. An example set of integrated economic accounts .........