Improving national accounts

Abstract

Purpose

To present empirical and theoretical evidence that our national accounts are improper for model applications. To propose a design for a micro foundation of the basic economic data that will give analytical national accounts. To present arguments for the need for an academic and scientific foundation of national accounting.

Design/methodology/approach

Reviews published works in the field. In the theoretical discussion simple index algebra and Edgeworth‐Bowley boxes are used.

Findings

Shows that conventional accounting methods and deflation procedures imply inconsistent national accounts.

Research limitations/implications

To fulfill the idea presented, that new designs for sampling of basic data‐based on new data technology have to be considered and developed. Also a new accounting system has to be developed based on modern administration systems.

Practical implications

If the idea is fulfilled a new kind of national accounts suited for meaningful and analytical model applications will be available. The need to revise national accounts will not be a case to consider.

Originality/value

The paper presents theoretical evidence that our national accounts are not analytical, which is requirement for meaningful model applications. National account users should be interested in the proposal and result.

Citation

Hansson, K. (2006), "Improving national accounts", Kybernetes, Vol. 35 No. 1/2, pp. 45-64. https://doi.org/10.1108/03684920610640227