Are the theoretical foundations of
the 2008 SNA still relevant today ?
- Setting the future direction of the National Accounts
- Building on the theoretical foundation of the 2008 SNA
Discussant: Wolfgang Strohm, Director of N.A.-Department,
DESTATIS, Germany
High Level Forum for the Long-Term Development of the SNA
17. – 18. November 2008, Washington D.C.
Topic of presentation:
The SNA: some outstanding issues
by Peter Hill
Three broad issues
 The scope of the SNA and its accounting
structure
 Different demands on the accounts for short
and long term analysis
 The need to reconstruct the production account
(capital services)
High Level Forum for the Long-Term Development of the SNA
17. – 18. November 2008, Washington D.C.
Folie 2
1. The scope of the SNA and its
accounting structure

The author proposes a different set and
sequence of accounts and a different
accounting structure.
Proposal: „The accounts should be presented in such
a way that the financial implications of the real
economic activities in which economic units engage
can be understood by users.“
High Level Forum for the Long-Term Development of the SNA
17. – 18. November 2008, Washington D.C.
Folie 3
2. Different demands on the accounts
for short and long term analysis

The existing SNA is meant to be a multi-purpose
system designed to meet a variety of analytic
and policy needs.
Proposal: Split the System into two different systems
of account
 one geared primarily to short term analysis
 the other one geared to long term analysis
High Level Forum for the Long-Term Development of the SNA
17. – 18. November 2008, Washington D.C.
Folie 4
3. The need to reconstruct the
production account (interest
and capital services)
„The main question adressed here is the appropiate
way in which to record the value of the services
contributed by fixed assets to production.“
Proposal: „The relevant interest to be charged in the
production account should be the total interest
payable on the current value of the fixed assets
whether this consists of the actual interest or interest
foregone.“
High Level Forum for the Long-Term Development of the SNA
17. – 18. November 2008, Washington D.C.
Folie 5
Three measure sticks

Concepts should make sense, be logical and
coherent

Concepts must be feasable to implement

Results must be understandable
High Level Forum for the Long-Term Development of the SNA
17. – 18. November 2008, Washington D.C.
Folie 6
Principles for a revision of the System of
National Accounts

Methodological changes should only be
introduced if they can be measured in a
satisfying way and if they are not obtained
solely by modelling (i.e. estimations as few as
possible and no valuation according to
unknown future flows). An increasing part of
estimations and assumptions would diminish
international comparability of NA figures.
High Level Forum for the Long-Term Development of the SNA
17. – 18. November 2008, Washington D.C.
Folie 7

In case of doubt transactions should be restricted to
observable market transactions (i.e. non-market
transactions and imputations only in few special cases
and as much as possible not beyond the status quo).

Problems of deflation (measuring constant price figures)
should be solvable for all items introduced by the
revision (i.e. no loss of quality compared with the status
quo).

Problems for the quarterly accounts as well as for the
regionalisation of NA should be solvable satisfactorily
(i.e. availability of statistical data).
High Level Forum for the Long-Term Development of the SNA
17. – 18. November 2008, Washington D.C.
Folie 8

In case of doubt the methodology should be in
accordance with business accounting.

Methodological changes should be accepted by
important users of NA not only in international
organisations but also in the countries (i.e.
questionnaires should be sent to the users
before final decisions are made).
High Level Forum for the Long-Term Development of the SNA
17. – 18. November 2008, Washington D.C.
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
Changes in methodology should be useful from
a practical or political point of view. Pure
theoretical and formal arguments should be no
reason for changing the SNA.

Difficult and problematic items of the revision
should first be tested within satellite accounts
and not be immediately introduced to the core
system of National Accounts.
High Level Forum for the Long-Term Development of the SNA
17. – 18. November 2008, Washington D.C.
Folie 10