TABLE OF CONTENTS
1. Appendix B of "The Penn World Table (Mark 5): An Expanded Set of
International Comparisons, 1950-1988," The Quarterly Journal of
Economics, May
1991.
a. Outline of Construction of Variables in the DATA
TABLE
b. Documentation of Variables in DATA TABLE
c. Discussion of selected countries not in DATA TABLE
2. Country Table
a. List of Countries in order of appearance in DATA TABLE
including Quality Grades for estimates and benchmark record. Appendix A2
of
Article.
b. List of selected additionak countries
3. DATA TABLE
4. Supplementary Country Data
----------------------------------------------------------------Appendix B
The Construction of the DATA TABLE: OUTLINE
A
B
General Variables
1. Population: Pop (COLUMN 1)
2. Exchange rates: ExR (COLUMN 17)
1985 entries
1. Real gross domestic product per capita: RGDPCH, RGDP,
RGDPTT,
and CGDP (COLUMNS 2,6,7, and 9)
a. Benchmark countries input data
i Countries covered by only one of the ICP 1970,
1975,
1980 and 1985 ICP benchmark studies
ii Countries covered by more than one benchmark
study
b. Consistentizing estimates over time of countries covered by more than one benchmark study:
1985 adjustments
c. Non-benchmark countries
2. Real shares of components of RGDP:
Consumption: c
(COLUMN [3]; Investment: i (COLUMN
[4] Government: g
(COLUMN
[5]; Net Foreign Balance
(100.0-c-i-g). Shares in
percentages.
a. Benchmark countries
b. Non-benchmark countries
3. Price levels
a. Gross domestic product: P (COLUMN [13])
b. Components
i Consumption: PC (COLUMN [14]
ii Investment: PT (COLUMN [15]
iii Government: PG (COLUMN [16]
c. GDP relative to US=100; y (COLUMN [8])
C Entries for other years
1. International prices of 1985
a. Consistentizing constant-price series in the
national accounts
b. Components: Consumption, Investment, Government, Net Foreign Balance
c. (COLUMN [6]) Chain-index of Real gross domestic product:
RGDPCH
(COLUMN [2])
d. Real gross domestic product: RGDP
e. Real GDP chain per equivalent adult: RGDPEA (COLUMN [18])
f. Real GDP chain per worker: RGDPW (COLUMN [19])
g. Capital Stock per Worker: KapW (COLUMN [20])
h. Producers Durables, % of Capital Stock: KDUR (COLUMN
[21])
i. Non Residential Construction, % of Capital Stock:
KNRES
(COLUMN [22])
j. Other Construction, % of Capital Stock: KOTHER
(COLUMN
[23])
k. Residential Construction, % of Capital Stock: KRES
(COLUMN [24])
2. Domestic absorption valued in 1985 prices but NFB
reflecting the terms of trade movement: RGDPTT
(COLUMN [7])
3. Current-year international prices
a. Gross domestic product in current-year
international prices: CGDP (COLUMN [9])
b. Component shares
i Consumption: cc (COLUMN [10])
ii Investment: ci (COLUMN [11])
iii Government: cg (COLUMN [12])
----------------------------------------------------------------c. Openness (exports + imports)/(CGDP): OPEN (COLUMN [25])
d. Real Gross National Product (% of CGDP): RGNP
(COLUMN
[26])
e. Gross Domestic Private Investment (% of grpss
domestic
investment) IPri (COLUMN [27])
The Construction of the DATA TABLE: DOCUMENTATION
I A 1.
Pop [1]
World Bank tape, May 1990 and Fall, 1990 Update.
I A 2. XR [17]
1950-1960: UN Development Centre data tape;
19601988: UN and World Bank sources. Taiwan from national sources after
1975.
I B 1. a. i RGDPCH [2], RGDP [6], RGDPTT [7], and CGDP [9] Obtained
from the
1985 benchmark study, using domestic-currency expenditures of 1990
vintage, or
extrapolations of components for single benchmark countries other than
1985.
The 1985 and other benchmark numbers used in this study differ
somewhat
from the originally published estimates. Note /1/
I B 1. a. ii
RGDPCH [2], RGDP [6], RGDPTT [7], and CGDP [9]
Obtained
from
1985 benchmark study as modified by consistentization (See Note/4/) If
country
did not participate in 1985, then components were extrapolated from the
1980
benchmark study, using consistenized constant-price national accounts
series.
I B 1. b. Consistentization. Note /4/
I B 1. c. RGDPCH [2], RGDP [6], RGDPTT [7], and CGDP [9]
Estimated
from an
equation based upon the relationship between a country's real Domestic
Absorption (DA) relative to the US and an estimate of its relative DA
derived
from price survey data used for post adjustment allowances for
international
personnel. Note /2/
I B 2. a. c [3], i [4], g [5]. Real shares of GDP taken directly from
the
benchmark estimates for 1980, or from
consistentized or extrapolated
components for countries
with more than one benchmark and/or
countries
that did not participate in the 1985 comparison.
I B 2. b. Real shares for non-benchmark countries ( c [3], i [4],
and g
[5]) were estimated from relationships between nominal
and real
shares
for the 60 benchmark countries for 1980. Note /3/
I B 3. a. Price Level of GDP P [13] is the PPP over GDP divided by
the
exchange rate [17] times 100. The PPP of GDP or any
component is
the
national currency value divided by the real
value in international
dollars. The PPP and the exchange
rate are both expressed as national
currency units per US
dollar.
I B 3. b. Price Level of components PC [14]. PI [15], and PG [16] is
derived in the same way as the price level of GDP with the
US=100.
I C 1. a. Countries with more than one benchmark will have slightly
modified
national accounts deflators for
consumption, investment and
government as
an input to the
estimation for other years. Note /4/
I C 1. b. Each component in international dollars for 1985 is
moved
to
another year by the national accounts growth rate
for that component
between 1985 and the given year. This
includes exports and imports
which
in 1985 are converted to
US dollars at the 1985 exchange rate. c
[3], i
[4], and g [5]
are obtained by dividing each component by the sum of
all
four. (See I C 1. d.)
I C 1. c. RGDPCH [2] is a chain index obtained by computing the
growth
rate
of RGDP between t-l and t, using the current
price component shares in
t-1
as described in I c 4. below.
I C 1. d. Real Gross Domestic Product, RGDP [6], is obtained in
year by
adding up consumption, investment, government
and exports and
subtracting
imports.
any
I C 1.e. Real GDP chain per equivalent adult: RGDPEA (COLUMN [18]). The
equivalent adult measure used here assigns a weight of 1.0 to all persons
over
15, and 0.5 for those under age 15. See f.n. 12 of text for additional
information.
I C 1.f. Real GDP chain per worker: RGDPW (COLUMN [19]) Worker for this
variable is usually a census definition based on economically active
population
The underlying data are from the International Labour
Organization, and have been interpolated for missing years.
I C 1.g. Capital Stock per Worker: KapW (COLUMN [20]) Capital stock has
been
estimated on a perpetual inventory basis using national deflators for the
components described in I C 1. h-k. below. Capital stock here is the sum
of
machinery and equipment, non-residential and other construction.
Residential
construction, change in stocks, and foreign investment are not included.
Details are provided in Note /5/.
I C 1.h. Producers Durables, % of Capital Stock: KDUR (COLUMN [21]).
Details
given in Note /5/.
I C 1.i. Non Residential Construction, % of Capital Stock: KNRES (COLUMN
[22])
Details given in Note /5/.
I C 1.j. Other Construction, % of Capital Stock: KOTHER (COLUMN [23])
Details
given in Note /5/.
I C 1.k. Residential Construction, % of Capital Stock: KRES (COLUMN [24]
Details given in Note /5/.
I C 2. RGDPTT [7] is obtained by modifiying RGDP by a factor
that
takes
account of gains or losses in the terms of trade.
Variations in the
ratio
of export to import prices and the
ratio of import to export
prices
between a given and base
year are weighted respectively by the ratio
of
imports to total trade and exports to total trade to obtain the gains
or
losses from trade. This follows the Courbis-Kurabayashi
method
discussed
in PWT3 (p. 214)
I C 3. Current Year International Prices
I C 3.a. CGDP [9] Estimates in current year international prices are
derived
from Geary aggregations involving up to 138 countries in all years. The
inputs
are the national expenditure on consumption, investment and government
and the
corresponding PPPs are extrapolated from 1985 by the change in the
component
deflator relative to the US change. The net foreign balance in each year
is
converted at current exchange rates. In PWT 4, the base year values for
1980
for the benchmark countries had explicitly been used. Because even a
number
of "benchmark" countries for 1985 could not be introduced into a Geary
aggregation of 150 detailed headings, it was decided to use the overall
Geary
results for 138 countries in 1985 as the base year values.
I C 3.b. i Consumption share: cc [10]; Investment share: ci [11]; and
Government share: cg [12] are obtained directly as output from the Geary
aggregation in each year. Shares may not add to 1.0 because the
denominator
includes the net foreign balance.
I C 3.c.
OPEN [25]
Exports plus Imports/ GDP is the total trade as a
percentage of GDP. The export and import figures are in national
currencies
from the World Bank and United Nations data tapes. Note that since the
export
and import figures are in real values are at exchange rates, it is
possible to
express OPEN in real terms by multiplying OPEN by P (divided by 100).
I C 3.d. RGNP [26] From the World Bank and UN data tapes the percentage
of
GNP to GDP has been provided. The user may interpret this percentage as
national prices or in the absence (the condition of the authors) of a
price
level of GNP that is different from the price level of GDP also as
international prices.
I C 3.e. IPri [27] This is the percentage of domestic investment
privately
initiated. The basic investment data in national prices is from the IMF
tape
on governement finance statistics and attributes all non-public
investment to
the private sector. To convert this ratio in national prices to
international
prices, one needs to know the relative price levels of public and private
investment. In general, public investment includes very little machinery
and
equipment. This means that in international prices IPri should rise with
the
level of income compared to its value in national prices.
II B Real gross national product; RGNP [2] is shown under the
RGDP
column
in each year. It is obtained up to 1981 as
described in PWT3
(pp.215-16).
Updating of the estimates is based on the growth rates in the following
sources; Thad P. Alton, et.al., "Economic Growth in Eastern Europe", New
York:L.W. International Financial Research, Inc. (Occasional
Paper
No.
95, Table 15), 1987;"Handbook of Economic
Statistics, 1986" CIA,
September , 1986; and Council of
Economic Planning and Development:
Republic of China,
"Industry of Free China", March, 1987, pp. 52,59.
Endnotes:
Note /1/ The countries participating in the 1985 benchmark comparisons
fall
into five groups: 22 OECD countries, 11 Asian countries including Japan
(also
in OECD), 22 African countries, 5 Group II countries in Europe including
Finland and Austria in the OECD, and a group of Carribean countries whose
comparisons are not yet complete. In Spring, 1991, no international
organization had put together a world comparison for 1985; consequently
we
were forced to carry out some of this work ourselves.
We had access to detailed data for only the 32 OECD and Asian
countries,
but because data for Nepal did not include all categories it had to be
linked
in with the other countries involving special treatment. For the 31
countries
with complete data, we carried out our own Geary aggregation. [ As noted
below
for 1980, we did not use the fixity principle, we made an allowance for
supercountry weighting, and used national accounts control totals of May,
1990. For the 22 African countries and for Hungary, Poland and
Yugoslavia we
had data which allowed us to link these countries to the above 31
countries
and Nepal at the level of C, I and G. By these means we were able to put
together estimates for 57 countries in 1985.
For 1980 we redid estimates that underlay PWT4, using national
accounts
data of May, 1990. There were three differences between the benchmark
data
underlying this paper and the Phase IV publication of the world
comparisons
for 60 countries for 1980 of the UN Statistical Office(1986). First, we
have
used as control totals the latest current national accounts data of the
countries as of May, 1990, while the UN in some cases uses national
accounts
as available in 1982 or l983. Second, in building up the world
comparisons,
we have not followed the so called fixity procedure but have simply used
a
Geary aggregation procedure involving all 60 countries. In contrast, the
procedure used by the OECD and the UN has been to build up the world or
regional comparisons from aggregations of the countries within a
grouping, say
Africa or the EC within OECD that retains the relationships between
countries
within their group. Third, we have used slightly different treatments of
two
categories, change in stocks and compensation of government employees,
and
used a different normalization procedure which mainly affects the
valuation of
the net foreign balance.
For 1975 and 1970 we have similarly re-run the Geary aggregations
using
May, 1990 national accounts revisions for those years. The 1985 RGDPCH
(and
CGDP, RGDP and RGDPTT) estimates of countries covered by more than one
benchmark study were adjusted to reconcile them with both the results of
other
benchmark years and the national income growth rates of the countries.
(Also
adjusted were the other benchmark values and the national accounts growth
rates, so that the adjusted values were consistent in the sense that any
year's adjusted value was equal to any other year's adjusted value if
extrapolated by the adjusted national accounts growth rate. NB: This
adjustment---"consistentization" process---was carried out at the level
of
Consumption, Investment, and Government, and is described in Note /4/.
For those benchmark countries not participating in 1985, the
procedure
was to value the 1975 or 1980 benchmark estimates of C,I, and G for these
countries at 1985 international prices using the growth rates for these
components from their national accounts together with the change in
international prices of the components between 1975 and 1985 or 198o and
1985.
The change in international prices can be estimated from the benchmark
estimates and the deflator for the numeraire country, the U.S.
Quality estimates are presented in the Country List for both
benchmark
and non-benchmark countries. Countries have been placed in three groups:
those
with multiple benchmarks, those with a single benchmark, and the
remaining
nonbenchmark countries. For the first countries the differences between
national accounts growth rates and those implicit in the benchmarks for
components and GDP were used as the criterion for the grade, with some
weight
being given to countries in more than two benchmarks. In general larger
differences between national growth rates and those implicit in multiple
benchmarks are associated with lower income countries. Further when
estimates, described in Note/2/ for nonbenchmark countries are made, the
estimating equation that is used displays larger residuals for low income
than
for high income countries.
A few low income multiple benchmark countries were given grades of
C or
better, based on consistency of their national growth rates and benchmark
data. However, several multiple benchmark countries with fairly large
differences were only given a D+ grade. Most single benchmark low income
countries were given a D+ or C- grade. Low income nonbenchmark countries
were
given a D grade (an exception is China which had quasi-benchmark
treatment in
1975), while most higher income nonbenchmark countries were assigned a C
grade. Iceland and Switzerland were not benchmark countries in 1985, but
the
OECD made estimates for these countries which we have used and for which
we
gave higher grades. In total, grades of A and B were assigned to only 28
of
the 139 countries.
Note /2/
DA
In PWT4 an empirical equation was found for estimating real
(domestic currency domestic absorption converted to dollars by the PPP)
for
nonbenchmark countries. The approach used an estimating equation where
the
left hand side variable was the per capita domestic currency DA converted
to
international dollars expressed relative to the United States.
The
right
hand side variables were alternative estimates of the left hand side,
where
national currency DA was converted to dollars using PPPs approximated
from
indexes developed for setting post-allowances for international employees
working abroad. The price information underlying the post-allowances is
far
from a national average, since rather expensive outlets are sampled and
expenditure weights are for the relatively affluent. However, the price
level
in Lagos, Dubai, or Tokyo relative to New York, as measured by postadjustment
surveys, may still contain considerable information that can be used to
complement the basic relationship between price levels and per capita
real
income.
In the estimating equations below for PWT5 the post adjustment
indexes
have again been used to provide an estimate of the real domestic
absorption of
each country; this estimate is obtained by dividing the national currency
domestic absorption by the PPP implicit in the post adjustment index.
The
International Civil Service Commission (ICSC) index is published in the
Monthly Bulletin of Statistics of the United Nations Statistical Office,
usually in September of each year.
It provides an index with New York
city
as a base. The other index that we also used in PWT4 has been supplied
to us
by Employment Conditions Abroad(ECA), an organization based in London
with
members including multinational firms, governments and non profit
international agencies. ECA produces a number of binary indexes and we
have
used that of the UK because of its broader coverage; for calculations,
New
York city has been taken as 100.
In PWT5 a third index was also used, that of the U.S. State
Department.
The State Department usually provides housing or a separate housing
allowance,
and since most post adjustment indexes are relatively weak in this area,
we
decided to experiment with this index also. The ECA index covered
somewhat
fewer countries than the ICSC index in 1985, so that the addition of a
third
index allowed us to sharpen some of our estimates. For the ICSC index
this
variable is termed r(UN), for the ECA estimate, r(ECA), and for the State
Department, r(USS).
The equations estimated for 1985 are given in (1) - (12) below with
the
standard errors of the coefficients in parentheses. The number of
observations differs among equations because each post adjustment index
has
its own group of countries without complete overlap. Two sets of
estimates
were developed, the first based mainly on 1985 benchmark data that are
given
in equations (1) - (6) below. The total number ofpotential countries
that
could be used in the equations was 77: 57 Phase V countries plus twenty
countries from 1975 and 1980 benchmarks not included in Phase V. In
fact,
post adjustment data were only available for a maximum of 76 countries.
(1)
ln r(j)
= .754 ln r[UN(j)] - .064
(.026)
(.067)
Root MSE = .263
n=70: Adj R-Sq=.926
(2)
ln r(j) = .708 ln r[ECA(j)] - .036
(.018)
(.046)
Root MSE = .199
n=73: Adj R-Sq=.957
(3)
ln r(j) = .758 ln r[USS(j)] + .132
(.020)
(.053)
Root MSE = .219
n=76: Adj R-Sq=.950
(4)
ln r(j) = .056 ln r[UN(j)] + .660 ln r[ECA(j)] - .027
(.104)
(.096)
(053)
Root MSE = .204: n=66: Adj R-Sq=.954
(5)
ln r(j) = .039 ln r[UN(j)] + .724 ln r[USS(j)] + .141
(.150)
(.150)
(065)
Root MSE = .228: n=70: Adj R-Sq=.944
(6)
ln r(j) = .228 ln r[USS(j)] + .499 ln r[ECA(j)] + .019
(.119)
(.111)
(.053)
Root MSE = .193: n=72: Adj R-Sq=.960
The second set of equations uses mainly 1980 data. It is based on
the
60 countries in Phase IV for 1980 brought up to 1985, plus six new
countries
for which 1985 was their first benchmark; only 65 for these countries in
fact
was covered by at least one post-adjustment index. Equations (7) - (12)
set
out these equations. The variable AD represents a dummy for Africa which
was
used in PWT4, and is discussed further below.
(7)
ln r(j)
= .751 ln r[UN(j)] - .262 AD + .030
Root MSE = .231
(.032)
(.089)
(.067) n=60: Adj R-Sq=.948
(8)
ln r(j) = .718 ln r[ECA(j)] - .278 AD + .038
(.026)
(.064)
(.043)
Root MSE = .166
n=62: Adj R-Sq=.974
(9)
ln r(j) = .776 ln r[USS(j)] - .196 AD + .214
(.025)
(.072)
(.053)
Root MSE = .186
n=65: Adj R-Sq=.968
(10) ln r(j) = .117 ln r[UN(j)] + .608 ln r[ECA(j)] - .270 AD + .035
(.095)
(.087)
(.067)
(.050)
Root MSE = .168: n=57: Adj R-Sq=.972
(11) ln r(j) = .058 ln r[UN(j)] + .716 ln r[USS(j)] - .199 AD + .198
(.142)
(.144)
(.076)
(.066)
Root MSE = .194: n=60: Adj R-Sq=.963
(12) ln r(j) = .282 ln r[USS(j)] + .462 ln r[ECA(j)] - .246 AD + .111
(.111)
(.103)
(.063)
(.051)
Root MSE = .159: n=62: Adj R-Sq=.976
The post adjustment indexes are taken separately in (1) - (3) and (7)(9) and
as pairs in equations (4) - (6) and (10) - (12). Equations with all
three
indexes were also estimated and could have been used; however, the signs
on
the UN coefficient were negative, and while they could be used in an
estimating equation, it was decided to go with the above equations which
have
plausible structural coefficients.
The coefficients on r(UN), r(ECA)
and
r(USS), when taken individually, range from about .70 to .78 indicating
that
typically prices in the capital cities relative to New York are low
relative
to the price level of GDP in the same countries compared with the U.S.
In
PWT4 based on 1980, we found that whichever post adjustment allowance was
used, the real domestic absorption for African countries was
overestimated, so
that a dummy variable was used for African countries. When a dummy
variable
for African countries was introduced in the equations (1) - (6) above,
the
coefficients were no longer significant, while they were in equations (7)
(12).
This might be explained by improvements in the post adjustment
price
samples or the benchmark price samples, or as a real change in the price
structures in major African cities.
If the exchange rate converted value were put on the right hand
side the
MSE is .275 in 1985 without an African dummy and .273 with, and
coefficient on
AD is not significant. When the left hand side was more heavily based on
1980, the MSE was .248 without AD, and .210 with AD, and the coefficient
on AD
was significant. If ECA and USS are also introduced into these
equations, the
ECA variable is always positive and with larger t values than USS or the
exchange rate based variable. The AD variable is only significant for
the
1960 based equation, and only in that equation is the coefficient on the
exchange rate variable better than on USS.
One final point may be noted about these estimating equations.
While
they have relatively large mean square errors, the distribution is such
that
as discussed below, large residuals are associated with lower income
countries. Second, the errors tend to be larger than in the estimating
equations used in PWT3 and PWT4. This may simply reflect that we live in
a
more complicated world, but we would suggest that there may be another
reason.
Each succeeding estimating equation incorporates more developing
countries
with larger associated errors in their price statistics.
As noted in the text, there were 81 countries for which benchmark
or
quasi-benchmark estimates could be used for 1985, so that it was
necessary to
estimate domestic absorption for 57 nonbenchmark countries. The
estimating
equations were used as follows. If a nonbenchmark country had all three
post
adjustment indexes, we would use equation (6) and (12), which were the
best
equations (lowest MSE) based on 1985 and 1980 data respectively. If only
two
indexes were available, we would use one of equations (4) - (6) or (10) (12); and if only one index was available, we would use one of equations
(1) (3) or (7) - (9). This would provide us two alternative estimates of
domestic
absorption for nonbenchmark countries for 1985.
These two estimates
were
merged in the following way.
First equations were estimated that associated the squared
residuals
(SR) from equations (6) and (12) and their level of per capita DA
relative to
the United States.
In (13) and (14) below, SR is the squared residual,
and R
real domestic absortion relative to the United States.
were
These equations
(13) [SR85(j)] = .076 (.012) - .108 R(j) (.033):
n = 77
(14) [SR80(j)] = .036 (.008) - .029 R(j) (.019):
n = 66
used to estimate an SR value for each nonbenchmark countries. The
reciprical
of each SR estimate was used as the weight of the two estimated Rs for
the
nonbenchmark countries. The resulting average domestic absorption
relative to
the U.S. was then the 1985 base for all further estimates.
A description is provided in Note /3/ of how the real shares of C, I and
G
were obtained for the nonbenchmark countries. The associated PPPs for C,
I,
and G and the national expenditures were then merged with those data for
the
benchmark countries. A Geary aggregation was then performed on these 138
countries, producing a consistent set of national absorption (and GDP
figures
when the net foreign balance is included) for all of the countries. This
procedure is different than PWT3 and PWT4, in that the benchmark values
are
not necessarily preserved for the benchmark countries in the base year in
PWT5.
Note /3/ Once values of real domestic absorption are available for 1985
as
discussed in the previous endnote, it is then possible to estimate the
real
shares for each of the 57 non-benchmark economies for which short cut
estimates have been made. We follow the same procedure used in PWT 3 and
PWT
4 to estimate share equations based on shares in national currency and
real
domestic absorption. These equations have been estimated for the 80 ever
benchmark countries that could be updated to 1985. The equations are:
Real Share
Share in National Currency
Consumption Investment Government
RBAR2
r(j)
Consumption
.900
(.027)
.150
(.088)
.126
(.106)
.062
(.053)
.992
Investment
-.066
(.027)
.854
(.089)
.243
(.107)
.096
(.054)
.907
Government
.166
(.035)
-.004
(.113)
.631
(.136)
- .157
(.068)
.881
These equations require as input an estimate of r(j), and the shares in
national currencies available from the World Bank tape. These equations
are
similar to those in other Phases of PWT but the relationships are
somewhat
weaker. On the basis of these real share estimates, PPPs for C,I, and G
can
be estimated for 1980; these inputs are in turn used to generate
estimates in
other years as in PWT 3 following the same methods as for PWT3.
--------------------------------------------------------------Note /4/ The procedure described as "consistentization" in PWT 4 is
briefly
discussed in the text and in this note. Table B2 provides the underlying
differences between implied benchmark growth and national growth rates,
the
Deltas. The Deltas have been calculated for each country participating
in
more than one benchmark study. The adjustment factors used to reconcile
the
the benchmark estimates and the national growth rates are derived using
the
Deltas and the parameter values used for variances of the benchmark
estimates
and the covariances among successive benchmark estimates and the
covariance
successive national accounts growth rates. It is assumed that the
covariance
between growth rates and bench mark estimates is zero.
In Table B2, the
variance of the growth rates is taken as unity, and the assumed variances
of
the benchmarks are given along with covariances between successive
benchmarks
and growth rates. These parameter values used in estimating the
adjustment
factors are given as columns 16. - 21. in Table B2.
The variances of the benchmark estimates are given below in Panel A
of
Table B1, and are based on a grouping of countries by growth rate and
level of
real GDP per capita. The covariances between the successive benchmarks
and
successive growth rates are given in Panel B of Table B1.
Table B1
Panel A
Variances Assumed for Benchmark Estimates for
Countries Grouped by Income and Growth Rate
GDP LevelGrowth group
1970
Benchmark Year
1975
1980
1985
1.High Income
Low Growth
1.7
1.6
1.7
2.0
2.Low Income
Low Growth
2.0
1.6
2.0
2.2
3.High Income
High Growth
1.8
1.6
1.8
1.8
4.Low Income
High Growth
1.4
1.2
1.4
1.6
Notes: Variances (or k's) are assumed the same for Consumption,
Investment and
Government. Low income countries are less than 50% of the U.S. in 1980,
and
low growth is less than 25% over one or all of the five year periods.
The
income and growth numbers are provided for each country in Table B2.
Panel B Values of Covariances Assumed for All Countries
Between Benchmark Estimates and Between Growth Rates and Benchmarks
Component
Consumption Investment Government
1. Between Benchmarks r(1)
.1
.4
.2
2. Between Growthrates r(2)
.1
.2
.4
Table B2 provides in columns [1] and [2] differences for each
component
between the benchmark in 1970 and 1975 and in 1975 and 1980 from the
estimate
derived from one benchmark and the national accounts growth rate for that
component. These Deltas are calculated in a somewhat different way than
in
PWT 4. Essentially, between any two benchmarks, the estimated PPP for
say
consumption in 1985 would be the 1980 benchmark PPP times the price
increase
for consumption for the country relative to the price increase for
consumption
for the world of the ICP countries in the two benchmarks.
Using the deltas together with the above variances and covariances
in
columns 16. - 21., adjustment factors have been estimated. Columns[3],
[4],
and [5] provide the adjustment factors that the consistentization
procedure
would call for in the benchmark estimates for 1970, 1975 and 1980.
Similarly,
columns [6] and [7] give the adjustment factors appropriate to the growth
rates between 1970 and 1975, and/or between 1975 and 1980, and 1980 and
1985.
Table B2
Adjustment Factors Dervived from the
Country
Procedure to Reconocile Benchmark and National Growth Estimates
Differences
Adjustment Factors
Comp- 70/75 75/80 1970 1975 1980 75/80 80/85
onent [1]
[2]
[3]
[4]
[5]
[6]
[7]
1 1.000 1.176
1.034
0.958 0.976 1.002
1 1.000 1.176
0.997
0.935 1.037 1.042
1 1.000 1.176
1.046
1.016 0.964 0.958
2 0.296 1.778
0.912
1.075
2 0.296 1.778
1.065
0.931
2 0.296 1.778
1.367
0.760
3 0.218 1.409
0.987
1.045 1.011
3 0.218 1.409
1.088
0.913 0.918
3 0.218 1.409
1.154
0.934 0.878
6 0.385 1.314
1.033
0.975
6 0.385 1.314
0.920
1.099
6 0.385 1.314
1.378
0.755
7 0.056 1.448
1.089
0.990 0.931 0.947
7 0.056 1.448
1.243
0.816 1.161 0.977
7 0.056 1.448
0.915
1.248 0.883 0.859
8 0.033 1.364
1.070
U.S.A.
1
0.9087 1.0054 1.1058
0.966 1.037
1.024 1.6 1.4 1.6 2.0 0.1 0.1
U.S.A.
2
1.0706 1.0572 1.1161
1.045 1.012
1.047 1.6 1.4 1.6 2.0 0.4 0.2
U.S.A.
3
0.9387 0.9052 1.0096
0.963 0.989
0.980 1.6 1.4 1.6 2.0 0.2 0.4
BRAZIL
1
1.2729
1.2 1.4
BRAZIL
2
0.1
1.2 1.4
BRAZIL
3
0.4
1.080
0.8330
0.953
0.4298
0.773
1.2 1.4
COLOMBIA
1
0.2
1.1488 0.9855
1.057 0.962
1.4 1.2 1.4
COLOMBIA
2
0.1 0.1
0.8321 0.8486
0.916 1.005
1.4 1.2 1.4
COLOMBIA
3
0.4 0.2
0.9827 0.6900
0.954 0.907
1.4 1.2 1.4
URUGUAY
1
0.2 0.4
0.9190
0.973
1.2 1.4
URUGUAY
2
0.1
1.2 1.4
URUGUAY
3
0.4
1.2 1.4
KENYA
1
1.2749
1.067
0.4207
0.768
0.2
0.8337 0.8879 1.1072
0.914 1.021
1.007 1.4 1.2 1.4 1.6 0.1 0.1
KENYA
2
1.4955 0.7024 1.8727
1.151 0.894
1.230 1.4 1.2 1.4 1.6 0.4 0.2
KENYA
3
0.8088 0.9228 0.6051
0.900 0.983
0.825 1.4 1.2 1.4 1.6 0.2 0.4
MALAWI
1
0.9670 1.2551
1.018
0.910
8 0.033
1.759
1.014
8 0.033
1.019
1.262
9 0.057
1.206
0.865
9 0.057
1.647
0.961
9 0.057
0.876
1.410
10 0.051
1.004
1.164 0.983
10 0.051
1.078
1.173 0.889
10 0.051
0.948
1.182 0.952
11 0.352
1.189 0.956
11 0.352
1.240 0.854
11 0.352
1.156 0.986
12 0.717
1.006
0.982 0.993
12 0.717
0.916
1.118 1.019
12 0.717
0.895
1.043 0.930
13 0.211
1.035
1.024 1.051
13 0.211
1.141
1.163 0.964
13 0.211
1.100
0.976 1.029
14 0.210
0.993
14 0.210
1.042
14 0.210
1.016 1.067
1.364
MALAWI
1.2 1.4 1.6 0.1 0.1
2
0.2728 1.8651
0.755
0.636 1.075
1.364
MALAWI
1.2 1.4 1.6 0.4 0.2
3
0.6572 0.6522
0.834
0.803 0.808
0.845
ZAMBIA
1.2 1.4 1.6 0.2 0.4
1
0.7889 1.4984
0.972
0.979 1.075
0.845
ZAMBIA
1.6 2.0 2.2 0.1 0.1
2
0.3992 1.8608
0.836
0.787 1.085
0.845
ZAMBIA
1.6 2.0 2.2 0.4 0.2
3
0.8306 0.5028
0.853
0.853 0.810
1.067
INDIA
1.6 2.0 2.2 0.2 0.4
1
1.0533 0.8367 0.7984
0.972 0.907
0.925 0.926 2.0 1.6 2.0 2.2 0.1 0.1
1.067
INDIA
2
0.7671 0.7989 0.8392
0.842 0.976
0.883 0.913 2.0 1.6 2.0 2.2 0.4 0.2
1.067
INDIA
3
0.9653 0.9103 0.7218
0.955 0.942
0.917 0.900 2.0 1.6 2.0 2.2 0.2 0.4
0.941
IRAN
1
0.9459 0.7200
0.920
2.0 1.6
2.2 0.1
0.941
IRAN
2
0.6827 0.7012
0.879
2.0 1.6
2.2 0.4
0.941
IRAN
3
1.1096 0.7192
0.938
2.0 1.6
2.2 0.2
1.407
JAPAN
1
0.9649 1.0210 1.0365
0.921 0.930
0.791 0.989
0.998 0.886
0.990 1.020
1.007 1.011 1.6 1.4 1.6 1.8 0.1 0.1
1.407
JAPAN
2
1.0939 0.9983 0.7420
1.007 0.939
0.974 0.905 1.6 1.4 1.6 1.8 0.4 0.2
1.407
JAPAN
3
0.7085 1.3368 0.8355
0.899 1.180
1.014 0.974 1.6 1.4 1.6 1.8 0.2 0.4
1.890
KOREA
1
1.2488 0.8331 0.9952
1.066 0.898
0.961 0.984 1.4 1.2 1.4 1.6 0.1 0.1
1.890
KOREA
2
1.0778 0.5848 0.8751
0.938 0.839
0.795 0.892 1.4 1.2 1.4 1.6 0.4 0.2
1.890
KOREA
3
1.1917 0.7943 1.1399
1.046 0.903
0.968 1.011 1.4 1.2 1.4 1.6 0.2 0.4
1.682
MALAYSIA
1
0.9779
1.4 1.2
0.1
1.682
MALAYSIA
2
1.1113
1.4 1.2
0.4
1.682
MALAYSIA
3
0.9622
0.992 1.007
1.037 0.972
0.986 1.012
0.988
15 0.073
0.980
0.979
15 0.073
1.759
1.548
15 0.073
2.256
0.622
16 0.133
0.951
1.015 1.007
16 0.133
1.308
0.845 0.988
16 0.133
1.294
0.846 0.967
17 0.103
0.986
1.104
17 0.103
1.865
0.986
17 0.103
2.504
0.683
19 0.128
1.039
19 0.128
1.155
19 0.128
0.810
20 0.695
1.008
1.038
20 0.695
1.064
0.897
20 0.695
0.916
1.061
21 0.830
0.989
1.045 0.976
21 0.830
0.967
1.024 1.044
21 0.830
0.878
1.066 0.925
22 0.835
0.975
1.160
1.4 1.2
PAKISTAN
0.2
1
1.0732 1.0120
1.030
1.021 1.011
1.6 2.0 2.2 0.1 0.1
1.160
PAKISTAN
2
0.1931 0.9156
0.594
0.572 0.806
1.6 2.0 2.2 0.4 0.2
1.160
PAKISTAN
3
0.3477 4.5391
0.849
0.924 1.252
1.6 2.0 2.2 0.2 0.4
1.387
PHILIPPI
1
0.9938 1.1025 0.9273
1.009 1.022
1.026 0.990 1.4 1.2 1.4 1.6 0.1 0.1
1.387
PHILIPPI
2
1.0004 0.7005 1.8674
0.996 0.984
0.931 1.207 1.4 1.2 1.4 1.6 0.4 0.2
1.387
PHILIPPI
3
0.9560 0.7283 1.7051
0.963 0.975
0.967 1.114 1.4 1.2 1.4 1.6 0.2 0.4
1.307
SRILANKA
1
0.8980 0.8338
0.939
0.943 0.934
1.2 1.4 1.6 0.1 0.1
1.307
SRILANKA
2
0.2494 2.1028
0.748
0.622 1.111
1.2 1.4 1.6 0.4 0.2
1.307
SRILANKA
3
0.2127 4.4763
0.713
0.747 1.221
1.2 1.4
1.460
THAILAND
1
0.976
1.2
1.460
THAILAND
2
0.901
1.2
1.460
THAILAND
3
1.146
1.2
1.406
AUSTRIA
1
1.6 0.2 0.4
0.9123
1.6 0.0
0.7035
1.6 0.2
1.6558
1.6 0.0
0.9315 0.9497
0.972
0.903
1.169
0.966
0.973 0.977
1.4 1.6 1.8 0.1 0.1
1.406
AUSTRIA
2
1.0239 1.3035
1.048
1.039 1.098
1.4 1.6 1.8 0.4 0.2
1.406
AUSTRIA
3
1.1139 0.8328
1.015
1.005 0.965
1.4 1.6 1.8 0.2 0.4
1.354
BELGIUM
1
0.9357 0.9981 0.9207
0.965 1.006
0.980 0.973 1.6 1.4 1.6 1.8 0.1 0.1
1.354
BELGIUM
2
1.1390 0.9848 0.9217
1.040 0.953
0.999 0.976 1.6 1.4 1.6 1.8 0.4 0.2
1.354
BELGIUM
3
0.7003 1.3534 0.7892
0.894 1.180
1.006 0.959 1.6 1.4 1.6 1.8 0.2 0.4
1.200
DENMARK
1
1.0180 0.9217
0.996
1.037
0.997
22 0.835 1.200
1.065
1.071
0.915
22 0.835 1.200
0.828
1.028
1.100
23 0.851 1.308
0.996
1.020 1.001 0.991
23 0.851 1.308
0.965
1.009 0.987 1.020
23 0.851 1.308
0.895
1.101 0.965 0.983
24 0.851 1.285
1.004
1.020 1.000 0.986
24 0.851 1.285
0.974
0.996 0.957 1.029
24 0.851 1.285
0.879
1.087 0.971 1.003
25 0.385 1.536
0.825
1.025 1.164
25 0.385 1.536
0.979
0.994 1.026
25 0.385 1.536
0.906
1.011 1.084
26 0.458 1.350
1.005
0.983
1.008
26 0.458 1.350
1.054
1.087
0.896
26 0.458 1.350
0.875
1.075
1.028
27 0.765 1.377
0.948
0.999 1.007 1.035
27 0.765 1.377
0.980
0.980 1.000 1.030
27 0.765 1.377
0.896
1.043 1.052 1.042
28 0.880 1.217
0.982
0.980
1.4 1.6 2.0 0.1 0.1
DENMARK
2
0.7959 0.9550
0.927
0.960
1.4 1.6 2.0 0.4 0.2
DENMARK
3
1.4882 0.8112
1.120
1.008
FRANCE
1.4 1.6 2.0 0.2 0.4
1
1.0177 0.9806 0.9641
1.002 0.985
0.988 1.6 1.4 1.6 1.8 0.1 0.1
FRANCE
2
0.9465 1.0898 0.9450
0.989 1.031
0.989 1.6 1.4 1.6 1.8 0.4 0.2
FRANCE
3
0.8803 1.1527 0.7616
0.958 1.050
0.937 1.6 1.4 1.6 1.8 0.2 0.4
GERMANY
1
1.0200 0.9619 0.9726
1.000 0.980
0.988 1.6 1.4 1.6 1.8 0.1 0.1
GERMANY
2
0.8559 1.1356 0.9791
0.962 1.075
1.001 1.6 1.4 1.6 1.8 0.4 0.2
GERMANY
3
0.8675 1.2274 0.7669
0.961 1.075
0.949 1.6 1.4 1.6 1.8 0.2 0.4
HUNGARY
1
0.9080 1.6399
1.030 1.163
1.4 1.2 1.4
HUNGARY
2
0.1 0.1
0.9664 1.0775
0.998 1.027
1.4 1.2 1.4
HUNGARY
3
0.4 0.2
0.8981 1.3329
0.990 1.115
1.4 1.2 1.4
IRELAND
1
0.2 0.4
1.0115 1.0347
1.009
1.012
1.2 1.4 1.6 0.1 0.1
IRELAND
2
0.7821 0.9084
0.921
0.937
1.2 1.4 1.6 0.4 0.2
IRELAND
3
1.2196 0.7780
1.038
0.957
ITALY
1.2 1.4 1.6 0.2 0.4
1
0.9805 1.1320 0.9506
1.010 1.038
1.001 1.6 1.4 1.6 1.8 0.1 0.1
ITALY
2
0.9746 1.0853 1.0134
1.005 1.032
1.014 1.6 1.4 1.6 1.8 0.4 0.2
ITALY
3
1.1282 1.1512 0.8463
1.062 0.990
0.985 1.6 1.4 1.6 1.8 0.2 0.4
LUXEMBER
1
1.0088 0.9402
0.995
1.029
0.996
28 0.880 1.217
0.851
0.956
1.155
28 0.880 1.217
0.889
1.073
1.022
29 0.803 1.264
0.980
1.003 1.008 1.011
29 0.803 1.264
0.984
1.030 0.930 0.999
29 0.803 1.264
0.888
1.030 0.955 1.033
32 0.523 1.270
0.992
1.045
0.978
32 0.523 1.270
0.971
1.085
0.961
32 0.523 1.270
0.815
1.042
1.095
33 0.726 1.183
0.978
0.988 0.999 1.021
33 0.726 1.183
1.024
0.954 1.045 1.007
33 0.726 1.183
0.869
1.091 0.986 1.019
34 0.352 1.615
1.053
0.960
34 0.352 1.615
1.028
0.969
34 0.352 1.615
0.943
1.053
35 0.618 1.920
0.969
1.036
35 0.618 1.920
1.001
0.999
35 0.618 1.920
1.328
0.720
36 0.373 1.434
1.003
0.985
1.4 1.6 2.0 0.1 0.1
LUXEMBER
2
1.5192 0.9016
1.119
1.013
1.4 1.6 2.0 0.4 0.2
LUXEMBER
3
1.1900 0.8012
1.035
0.967
1.4 1.6 2.0 0.2 0.4
NETHERLA
1
1.0140 1.0359 0.9753
1.011 1.004
0.998 1.6 1.4 1.6 1.8 0.1 0.1
NETHERLA
2
0.8096 1.0857 0.9340
0.931 1.069
0.977 1.6 1.4 1.6 1.8 0.4 0.2
NETHERLA
3
0.7617 1.3530 0.8509
0.927 1.163
0.987 1.6 1.4 1.6 1.8 0.2 0.4
SPAIN
1
0.9583 0.9242
0.972
0.973
SPAIN
1.4 1.6 1.8 0.1 0.1
2
0.9471 0.8358
0.957
0.934
SPAIN
1.4 1.6 1.8 0.4 0.2
3
1.5008 0.7786
1.116
0.995
U.K.
1.4 1.6 1.8 0.2 0.4
1
0.9691 1.0755 0.9962
0.999 1.030
1.007 1.6 1.4 1.6 2.0 0.1 0.1
U.K.
2
1.1289 0.9530 1.1107
1.047 0.969
1.035 1.6 1.4 1.6 2.0 0.4 0.2
U.K.
3
0.8938 1.2613 0.7622
0.976 1.076
0.957 1.6 1.4 1.6 2.0 0.2 0.4
YUGOSLAV
1
0.8720
1.2 1.4
YUGOSLAV
2
0.1
1.2 1.4
YUGOSLAV
3
0.4
1.2 1.4
HONGKONG
1
0.2
0.957
0.9219
0.979
1.1730
1.050
0.9158
0.979
HONGKONG
1.6 1.8 0.1
2
1.0040
1.001
HONGKONG
1.6 1.8 0.4
3
2.3116
1.253
GREECE
1.6 1.8 0.2
1
1.0078
0.997
36 0.373
1.039
0.953
36 0.373
0.992
1.010
37 0.318
0.988
1.014
37 0.318
1.047
0.944
37 0.318
1.004
0.996
38 0.988
1.008
0.990
38 0.988
1.027
0.969
38 0.988
1.017
0.980
39 0.744
1.003
0.996
39 0.744
0.982
1.022
39 0.744
1.038
0.958
40 0.944
0.956
1.053
40 0.944
1.013
0.984
40 0.944
0.923
1.098
41 0.071
1.000
1.000
41 0.071
0.914
1.119
41 0.071
0.970
1.037
42 0.095
0.889
1.434
1.002
GREECE
1.4 1.6 0.1
2
1.1430
1.434
1.049
GREECE
1.4 1.6 0.4
3
0.9742
1.460
0.992
PORTUGAL
1.4 1.6 0.2
1
0.9640
1.460
0.990
PORTUGAL
1.4 1.6 0.1
2
1.1740
1.460
1.059
PORTUGAL
1.4 1.6 0.4
3
1.0115
1.391
1.003
CANADA
1.4 1.6 0.2
1
1.0241
1.391
1.006
CANADA
1.6 1.8 0.1
2
1.0906
1.391
1.029
CANADA
1.6 1.8 0.4
3
1.0522
1.363
1.014
FINLAND
1.6 1.8 0.2
1
1.0091
1.363
1.002
FINLAND
1.6 1.8 0.1
2
0.9419
1.363
0.981
FINLAND
1.6 1.8 0.4
3
1.1157
1.506
1.030
NORWAY
1.6 1.8 0.2
1
0.8788
1.506
0.969
NORWAY
1.6 1.8 0.1
2
1.0443
1.506
1.014
NORWAY
1.6 1.8 0.4
3
0.7889
1.564
0.938
CAMEROON
1.6 1.8 0.2
1
1.0000
1.564
1.000
CAMEROON
1.4 1.6 0.1
2
0.7300
1.564
0.894
CAMEROON
1.4 1.6 0.4
3
0.9100
1.187
0.973
IVORY CO
1.4 1.6 0.2
1
0.7300
1.140
42 0.095
0.976
1.028
42 0.095
1.039
0.958
43 0.050
0.961
1.045
43 0.050
0.801
1.297
43 0.050
1.045
0.951
44 0.015
0.846
1.204
44 0.015
0.929
1.090
44 0.015
0.870
1.171
45 0.102
1.007
0.992
45 0.102
1.068
0.921
45 0.102
0.907
1.122
46 0.063
0.989
1.013
46 0.063
0.980
1.024
46 0.063
0.901
1.125
47 0.158
0.947
1.066
47 0.158
1.006
0.993
47 0.158
0.919
1.105
48 0.114
0.961
1.187
0.936
IVORY CO
2.0 2.2 0.1
2
0.9300
1.187
0.980
IVORY CO
2.0 2.2 0.4
3
1.1100
0.852
1.024
MADAGASC
2.0 2.2 0.2
1
0.9000
0.852
0.978
MADAGASC
2.0 2.2 0.1
2
0.5100
0.852
0.826
MADAGASC
2.0 2.2 0.4
3
1.1300
1.204
1.028
MALI
2.0 2.2 0.2
1
0.6400
1.204
0.911
MALI
2.0 2.2 0.1
2
0.8000
1.204
0.939
MALI
2.0 2.2 0.4
3
0.6800
1.352
0.915
MOROCO
2.0 2.2 0.2
1
1.0200
1.352
1.005
MOROCO
1.4 1.6 0.1
2
1.2600
1.352
1.086
MOROCO
1.4 1.6 0.4
3
0.7400
0.918
0.915
SENEGAL
1.4 1.6 0.2
1
0.9700
0.918
0.994
SENEGAL
2.0 2.2 0.1
2
0.9400
0.918
0.983
SENEGAL
2.0 2.2 0.4
3
0.7500
1.636
0.936
TUNISIA
2.0 2.2 0.2
1
0.8500
1.636
0.957
TUNISIA
1.4 1.6 0.1
2
1.0200
1.636
1.007
TUNISIA
1.4 1.6 0.4
3
0.7700
2.789
0.926
BOTSWANA
1.4 1.6 0.2
1
0.8900
1.047
48 0.114
1.017
0.979
48 0.114
0.952
1.059
49 0.023
0.969
1.035
49 0.023
1.109
0.885
49 0.023
0.865
1.178
50 0.086
0.931
1.086
50 0.086
0.864
1.200
50 0.086
0.990
1.012
51 0.031
0.933
1.081
51 0.031
1.016
0.981
51 0.031
0.943
1.069
52 0.076
1.040
0.957
52 0.076
1.071
0.923
52 0.076
0.810
1.267
2.789
0.969
BOTSWANA
1.4 1.6 0.1
2
1.0600
2.789
1.021
BOTSWANA
1.4 1.6 0.4
3
0.8600
1.020
0.957
ETHIOPIA
1.4 1.6 0.2
1
0.9200
1.020
0.983
ETHIOPIA
2.0 2.2 0.1
2
1.3700
1.020
1.094
ETHIOPIA
2.0 2.2 0.4
3
0.6700
1.296
0.912
NIGERIA
2.0 2.2 0.2
1
0.8100
1.296
0.945
NIGERIA
1.4 1.6 0.1
2
0.6000
1.296
0.833
NIGERIA
1.4 1.6 0.4
3
0.9700
0.990
0.991
TANZANIA
1.4 1.6 0.2
1
0.8300
0.990
0.962
TANZANIA
2.0 2.2 0.1
2
1.0500
0.990
1.014
TANZANIA
2.0 2.2 0.4
3
0.8500
0.984
0.963
ZIMBABWE
2.0 2.2 0.2
1
1.1100
0.984
1.022
ZIMBABWE
2.0 2.2 0.1
2
1.2300
0.984
1.061
ZIMBABWE
2.0 2.2 0.4
3
0.5600
0.876
2.0 2.2 0.2
Table Entries: 1. Country number. 2. per capita GDP of country relative
to the
U.S. 3. GDP growth, 1980-85 4. Country name 5. category group; 1 =
consumption, 2 = government, and 3 = investment. 6. - 8. the deltas, are
the
differences between benchmark growth rates and national growth rates;
DELTA1
refers to 1975-70, DELTA2 refers to 1980-75, and DELTA3 refers to 198580. 9.
- 12. Adjustment factors for benchmark estimates for 1970 (F70), 1975
(F75),
1980 (F80) and 1985 (F85). 13. -15. Adjustment factor for national
growth
rates between 1970 and 1975 (F75-70), 1975 and 1980 (F80-75) and 1980 and
1985
(F85-80). 16.-19. are the variances of the 1970, 1975, 1980 and 1985
benchmark estimates when the variance of the growth rates is taken as 1.
20.
is the r(1) value used to obtain the covariance between successive
benchmarks.
21. is r(2) value used to obtain the covariance betweem successive growth
rates. The covariance between successive growth rates is the square root
of
the product of the variances of the two growth rates times the r(2) value
in
Panel B of Table B1, and cannot exceed 1.0 because the variances of the
growth
rates are l.0. The covariance between the 1970-75 and the 1980-85 growth
rates would use r(2) squared. Between benchmarks the squareroot of the
variances of the two benchmarks would be multiplied times the value of
r(1)
for successive benchmarks, and r(1) squared or cubed for benchmarks ten
of
fifteen years apart.
Note that when countries have participated in two
but
less than 4 benchmarks, there will be correspondingly less Deltas and
adjustment factors.
Note /5/: Estimation of the capital stock has been carried out in two
stages,
first generating a constant international price time series of investment
and
second applying a capital depletion procedure to the series. The method
followed is similar to what has been done on a national level for many
countries in constant national prices. M. Ward (1970,) has examined many
of
the issues for the OECD countries. The procedure used is conventional,
but
ignores many important issues including the importance of maintenance
expenditures and the likely difference in capital depletion rates across
countries.
Investment in 1980 international dollars was the basis for most
countries; it does not include foreign investment and change in stocks
which
have not been included in capital stock in our treatment. We take four
components, plant and equipment, non-residential building, other
construction,
and residential building. For each of these items, national growth rates
were
applied to obtain estimates forward and backward from 1980, or if not
available in 1980, from 1985. Since assumed lifetimes for construction
is
over 30 years, we tried to obtain growth rates back to at least 1950,
where
possible.
Many countries do not provide these component growth rates to the
United
Nations, so that we were only able to work with 40 countries, with a
heavy
concentration on OECD countries. Where countries had only partial time
series
of growth rates for a component, we made assumptions to fill in the rest
of
the series. Since we have the growth rate of aggregate domestic
investment
for all of the countries with which we worked, we could make some
reasonable
estimates for missing figures. The result of this work was a series in
1985
international prices of the four components of investment described
above.
Our assumption in this first round for capital stock estimation was
that
each type of investment had an expected number of years of use common to
all
countries.
These figures are plant and equipment-13.25 years;
residential
buildings-40 years, non-residential buildings-36 years, and other
construction-40 years. They are median estimates based on U.S.
experience, and
they are basically for depreciation rates for tax purposes, and need not
reflect the true life of these items for the U.S., let alone other
countries.
The method of double declining balance was used in applying these length
of
life figures. Depending on the country availability it was possible to
estimate the stock of each of these components from 1980-1988.
The total of capital stock provided in PWT 5 includes plant and
equipment, non-residential construction and other construction.
Residential
construction has been estimated and provided as a ratio to the sum of the
above three items.
Note/6/. This note discusses two sets of countries, those historically
planned
economies (HPEs) that were in PWT 4, and an additional set of
nonbenchmark
countries. For both these groups of countries we provide estimates of
their
per capita income in 1985 international dollars and their population.
These
income estimates, as the discussion should make clear, are subject to
wide
margins of error. They are provided because we know some users may wish
a
"best guess" estimate.
A. The Historically Planned Economies
In PWT 5 we have included 4 countries that have at various times
had
significant degrees of central planning, China, Hungary, Poland and
Yugoslavia. These countries had full benchmark treatments except for
China,
which was only a partial study. Romania was a bull benchmark country in
1975
but the 1975 results could never be extrapolated because the necessary
national time series data were not available.
Because China, Hungary,
Poland
and Yugoslavia are also members of the World Bank, and have since PWT 4
provided significant time series of current and constant price national
accounts, it was possible to treat them like any other country treated
as a
market economy in PWT 4. In PWT 3 and PWT 4, these HPEs had been grouped
with
Bulgaria, Czechoslovakia, Germany, D.R., Romania, and the U.S.S.R. and
only a
time series of population and real GNP per capita were provided. A
description of the procedures used was given in Summers and Heston (
"Improved
International Comparisons of Real Product and its Composition, 1950-80"
Review
of Income and Wealth June, 1984, pp. 215-16).
Briefly we had linked Bulgaria, Czechoslovakia, and Germany, D.R.,
to
the 1975 benchmark estimates of Hungary, Poland, Romania and Yugoslavia
by
slightly raising their estimates from an ECE report(United Nations,
U.N.Bulletin for Europe, Vol.31, No.2, prepared by Secretariat, Economic
Commission for Europe, 1980). Estimates for the Soviet Union had been
taken
from the Joint Economic Committee paper of Edwards, Hughes and Noren.
Growth
rates for China and Russia were from separate sources, and for the
remaining
countries from Alton and associates (except for Yugoslavia for which
their SNA
based growth rates available. With the recent political and economic
changes
in all of these countries, there appears to be much evidence that the
levels
of all the HPEs except, perhaps, China, had been overestimated, and that
most
certainly the growth rates were not consistent with lowered levels of per
capita GDP.
For these reasons, we have not attempted to present a time series
for
Bulgaria, Czechoslovakia, Germany, D.R., Romania, and the U.S.S.R. What
we
have done is to present a 1985 estimate for each of these countries.
This
estimate is related to previous PWT estimates in the following way. The
1985
benchmark estimates for Hungary, Poland and Yugoslavia are below what
would be
obtained by extrapolating the 1980 benchmarks to 1985, even allowing for
a
change in methodology in 1985. The same trend was observed between the
1975
and 1980 benchmarks for these countries. These points are discussed
further
in Heston and Summers ("Consequences of Expanded Availability of Goods
and
Services for Price Collection and Measurement of Trends in Output and
Employment, " Paper presented to Conference on Economies in Transition,
Bureau
of Labor Statistics and Eurostat, Washington, Feb 14-16,1991).
The following illustrates the extrapolations compared to the 1985
results for Phase V benchmark estimates for 1985. [Note that the actual
benchmark figures of 31.2 of the per capita GDP of the US. for Hungary,
24.5
for Poland and 30.3 for Yugoslavia from, (International Comparison of
Gross
Domestic Product in Europe 1985, Report of the European Comparison
Programme,
Economic Commission for Europe, CESSS Study No. 41, 1988) are somewhat
different than the figures given below because for PWT 5 we have
aggregated
the major components of GDP using all countries, not simply those in the
ECE.]
For the three HPEs in Phase V, column (1) gives the PWT 5 results based
on the
benchmark study cited above, column (2) the Phase IV estimate
extrapolated to
1985, and column (3) the PWT 4 estimate extrapolated to 1985. The
comparison
shows the systematic
Per Capita GDP 1985 [US =100]
Country
PWT 5
(1)
30.8
22.7
Phase 4 to 1985
PWT 4 to 1985
(2)
(3)
Hungary
37.4
46.0
Poland
33.2
39.2
Yugoslavia
30.3
33.7
40.4
decline in the relative position of these countries through successive
benchmarks. [Note, that PWT 4 is based on the Phase III 1975 benchmark.]
Some
of the difference between column (2) and (3) represents an attempt for
Phase
IV and Phase V to take closer account of quality differences.
In addition, Phase V made an adjustment, either not made, or made
on the
basis of capital per worker, in other benchmarks, that assumed 50% lower
output per worker in the service sectors of general government, education
and
health as compared to Austria. This was a significant adjustment that,
if
made in Phases III and IV, would lower by 10% the estimates in columns
(2)
and (3) in relation to column (1). As these adjustments were not made
for
other countries in 1985, a non comparability is introduced by using the
figures in column (1). However, at this time we are not able to
precisely put
these figures on the same basis as previous benchmarks, but we plan to do
so
at a later date.
In effect, we have accepted these lower 1985 benchmark estimates
and
effectively marked down Bulgaria, Czechoslovakia, Germany, D.R., Romania,
and
the U.S.S.R. by the factor by which Hungary, Poland and Yugoslavia were
in the
1985 benchmark below what they would have been in 1985 if the 1975
results
(using 1985 methodology) were extrapolated to 1985. These estimates are
given
in Panel B or Table B3 below along with the 1985 population. Caveat
emptor!
It goes without saying that these estimates are subject to large errors,
but
that with Germany D.R. now part of larger Germany, and with Bulgaria,
Czechoslovakia and the U.S.S.R. participating in Phase VI, there are
better
figures on the horizon.
China has been treated differently than other HPEs. Our treatment
is
based upon the 1975 estimates of I.B. Kravis ("An Approximation of the
Relative Real per Capita GDP of the People's Republic of China," Journal
of
Comparative Economics, Vol.5, No. 1, March, 1981. Pp. 60-78). The basic
difficulty in using this estimate is that published growth rates for
China are
so high [The World Bank accepts a per capita figure of 5.4% from 196588(World
Development Report, 1990, p.187) implying a doubling every 13 years. Yet
China always claims a low level of GDP relative to India and other
developing
countries for the purpose of obtaining loans. When Kravis initially
published
an estimate of China as 12.3 % of the U.S. in 1975 (India was 6.6%), it
was
criticized as too high but the critics did not offer reasons to change
it.
However, that figure coupled with China's growth rate would have put
China
well over 20% of the U.S. in 1988, which most observers do believe is too
high.
Our conjecture is that Chinese growth rates are too high because
they
are heavily based on growth in physical output figures rather than
deflated
expenditure series. In any event we have extrapolated the Kravis PPPs
forward
to 1985 and used that as the basis for making China's estimates for that
year
because we feel this more closely approximates a correct deflation
procedure.
For other years China has been treated like other countries using their
national accounts submissions in current and constant prices as provided
to
the U.N. and the World Bank. This procedure puts China at about 13% of
the
U.S. in 1988, and almost 3 times the level of India. This differential
with
India may be high because the benchmark estimate for India in 1985 was
unusually low (its consumption per capita was less than Bangladesh!)
compared
to earlier benchmarks, so that our best guess is that China would be
somewhat
over twice India rather than three times India. Again, the user is
warned,
but may perhaps be cheered by the likelihood that China will participate
in
some form in Phase VI, so that better figures should be forthcoming.
B. Additional Nonbenchmark Countries
The estimating equation described in Note/2/ requires a price index
based on post adjustments, and a national currency GDP estimate. These
data
are available for a number of countries not included in PWT 5. Usually
these
countries do not have an extended time series, even of current price
national
accounts, and usually no constant price series. However, as some
interest may
attach to estimates for these countries, even if only for one year, they
are
included in Panel B of Table B3.
We have also included estimates in Panel B of even a more casual
nature
for three CPEs, Cuba, Viet Nam, and North Korea. These last three
estimates
are based on the work of Donald Roy ("Real Product and Income in China,
Cuba,
North Korea and Vietnam", Development Policy Review, SAGE, London, Vol 8,
1990, pp. 77-81). The spirit of these additions is to stimulate work
that may
allow reasonable estimates for these countries to be developed in the
near future.
Table B3
Estimates of Real GDP in 1985--US=100
Panel A: Countries not Previously in PWT
Country
Antigua
Brunei
Cuba
Djibouti
Libya
Nambibia
North Korea
Vietnam
Yemen, S-PDR
Relative per Capita GDP Population (000)
19.5
108.7
19.9
8.3
45.0
18.1
14.3
3.1
6.6
80
220
10,090
43
3,600
1,555
20.380
59.710
6.850
Panel B: Historically Planned Economies in PWT 3 and PWT 4
Bulgaria
Czechoslovakia
Germany,D.R.
Romania
U.S.S.R.
28.9
39.6
42.3
20.5
31.3
8,960
15,500
16,640
23,020
278,620