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Measuring GDP by Final Demand Approach An Introduction

Measuring GDP by Final Demand Approach An Introduction. Vu Quang Viet International Workshop on Measuring GDP by Final Demand Approach Shenzhen, China 25-27 April 2011. Definition of GDP by final expenditure. Shares of components of GDP, 2009. Supply and use table, year = t.

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Measuring GDP by Final Demand Approach An Introduction

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  1. Measuring GDP by Final Demand Approach An Introduction Vu Quang Viet International Workshop on Measuring GDP by Final Demand Approach Shenzhen, China 25-27 April 2011

  2. Definition of GDP by final expenditure

  3. Shares of components of GDP, 2009

  4. Supply and use table, year = t

  5. Estimation in constant prices, year = t+n • Given • Industry output in basic prices • Product price indexes • Data on exports and imports • Preliminary data on general government FCE and GCF • Limited information on household FCE • Need to do • Convert industry output to product output in purchasers’ prices • Deflate product output • Estimate products consumed as intermediate inputs • Estimate total products that can be used for GCF and household FCE

  6. Data given and estimated, year = t+n Shares/coefficients in In constant prices

  7. Estimation in constant prices, year = t+n Based on base-year ratios which then adjusted to given totals • Estimation by: • Extrapolation based on survey, • Analysis of production and import data

  8. Estimation of trade (wholesaling retailing) and transport (freight) margins for base year • Direct measurement of output of wholesaling, retailing and freight transport services provided to kind of products. Normally: • Wholesaling margins are assigned to intermediate consumption and gross capital formation • Retailing margins are assigned to household final consumption • Indirect measurement of margins • Percentage difference between retail price (excluding all sale taxes) and basic price (normally called wholesale price or producer price) of a product unit . These unit prices are regularly collected to calculate CPI and PPI. • Allocation rule: Normally margin on a given product is allocated proportionally to the values of products used.

  9. Taxes on products by kind of products of base-year • Ratios of taxes on products of the base year are calculated by kind of products. • For that, taxes are distributed proportionally to the values consumed, excluding consumption categories that are either not subject to taxes or subject to tax deduction.

  10. Estimation of margins and product taxes for the current year • The same ratios are applied to estimate margins and product taxes for the current year for both constant and current prices. • Margins in constant prices: apply the ratios to values of supply at basic values in constant prices. • Margins in current prices: apply the ratios to the values of supply at basic values in current prices.

  11. Trade and transport margins in US, 2002

  12. Trade and transport margins in US, 2002

  13. Allocation of supply of goods and services destined to final expenditures • Basically, supply of a particular good or service destined to final expenditures = Total uses - Exports - Intermediate consumption • Thus, this residue can go either to final consumption or gross capital formation. • Allocation rules: • Construction after deducting maintenance should go to GCF • New automobiles should be allocated to households (FC) and other sectors (GCF) on the bases of car registration. Old car is estimated differently • Machineries (need to identify them properly) should go to GCF. • Besides known national inventories (oil, cereal, etc.), shares of products going to inventories should be based on surveys or base-year ratio (if no information is available. • Estimation rules: • Base year: all sources of data should be confronted to arrive at reliable data at both detailed and aggregate levels. • Annual/Infra Annual: indicators based on limited but consistent set of data are used to extrapolate base-year data.

  14. End

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