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Quarterly National Accounts and Economic Policy in Korea

Quarterly National Accounts and Economic Policy in Korea. OECD Working Party on National Accounts 1 ~ 3 December 2010, Paris, France. Min Woo KIM National Income Statistics & Coordination Team National Accounts Office Economic Statistics Department The Bank of Korea. Introduction.

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Quarterly National Accounts and Economic Policy in Korea

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  1. Quarterly National Accounts and Economic Policy in Korea OECD Working Party on National Accounts 1 ~ 3 December 2010, Paris, France Min Woo KIM National Income Statistics & Coordination Team National Accounts Office Economic Statistics Department The Bank of Korea

  2. Introduction • 1957 : Compilation of ANA by the Bank of Korea • 1968 : Compilation of QNA • 1999 : Inflation-targeting monetary policy regime • 2000 : Requests on rapid GDP estimate from the policymakers, academic circles, and journals • 2001 : Development of one-step ahead forecasting model of GDP growth • 2005 : Compilation of ‘Advance’ estimate(D+28) • 2008 : Compilation of ‘Flash’ estimate(D+5)

  3. Quarterly National Accountsand Economic Policy Preemptive Economic Policy Decision Monetary Policy Committee Ministry of Strategy and Finance

  4. Flash Estimate • Compilation completed within 5 days of the end of the reference quarter • Monthly data of first two-month and various daily collected data • Judgemental extrapolation based on many streams of official and unofficial source data and models • Production/Expenditure approaches and balancing procedure • Provided only to Monetary Policy Committee • Not disclosed to the public

  5. Advance & Preliminary Estimate ─ Advance • Compilation completed and announced within 28 days of the end of the reference quarter • Provisional corporate financial statements • Published to the public ─ Preliminary • Compilation completed and released within 70 days of the end of the reference quarter • Final corporate financial statements and various quarterly statistics(Statistics Korea) • Published to the public

  6. Flash/Advance/Preliminary

  7. Revisions of Estimates • Revisions: incorporation of more complete or better source data

  8. Issues & Reconciliation • Statistics vs. Forecasts • Flash and Advance estimate are just forecasts, not statistics. • They are statistics: They still depend on the source data and a reasonable inference of the current economic situation based on various quantitative and qualitative information. • Accuracy vs. Rapidity • The Flash or Advance estimate is premised on the sacrifice of statistical accuracy. • Rapidity is more important: A rapid but a slightly inaccurate estimate is much better than the accurate statistics after a long time lag in a new era. • Transparency vs. Policy priority • It is problematic that why is the Flash estimate provided only to monetary policy committee • Policy priority should be emphasized: Its public release should be put off until its statistical stability is clearly proven. It is desirable for the public good to provide it to policymaker. • Extra burden vs. User friendly • The compilation of the Flash or Advance estimate is certainly an additional burden to compilers, which might cause a lack of precision in statistics. • Users are the reason why we are: User satisfaction is also one of the elements in evaluating the quality of statistics.

  9. Policy Achievements of Practices • Increasing importance of more up to date macroeconomic statistics (especially in inflation-targeting monetary policy regime) • One-step ahead policy considerations • Reducing the time lag between turning point in the business cycle and policy measures • Making strong meat counter-cyclical policy near reference date digestible • Improvement in the effectiveness of preemptive economic policy measures and confidence in them

  10. Way Forward … • Less model • Less judgement • More source data • Statistical infrastructure and capacity still be primary priority • Development of monthly GDP

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