A Framework for Monitoring Economic Development: Datasets of Interest Rob Edwards

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A Framework for Monitoring
Economic Development:
Datasets of Interest
Rob Edwards
Inter-regional Adviser, United Nations Statistics Division
International Forum on Monitoring National Development: Issues and Challenges
27-29 September 2011, Beijing, China
Session Outline
 What is “economic growth”?
 Measures of GDP
 Reformulation of the drivers of GDP growth
 Relevant datasets
 The challenge
2
What is “economic growth”? (1)
 This presentation follows on from discussions of
comparative advantage and factor endowments
in the context of the theory of growth identification
and facilitation
 It is in this context that I am defining “economic
growth” as the growth in total GDP (nominal and
volume) and in GDP per capita
 Also of interest are the drivers of economic
growth and the changing industry composition of
the economy
3
What is “economic growth”? (2)
 Stiglitz, Sen and Fitoussi argue that GDP can
only be the starting point for assessing economic
performance and social progress
 We need to keep in mind that:
• some incomes generated from production are
payable overseas
• changes in the terms of trade can have significant
impacts on national disposable income
• GDP is a “gross” concept --- we need to allow for
depreciation ( and, ideally, for depletion of natural
resources used up in production)
• there are many other dimensions to social progress
beyond economic growth considerations, e.g. health,
education, security and opportunity
4
Measures of GDP
 Expenditure approach
 Production approach
 Income approach
 Key point --- supply/use tables and/or inputoutput analyses are extremely useful in
reconciling the various measures
 The availability of supply/use and/or input-output
tables will also position the NSO to be able to
inform on many other dimensions of economic
and environmental issues of concern
5
Expenditure-based GDP
 Final consumption expenditures of households,
general government and non-profit institutions
serving households
 Gross capital formation of all institutional sectors
(includes changes in inventories)
 Exports of goods and services less imports of
goods and services
Typically presented in nominal and volume terms
6
Production-based GDP
For all industries --Value of output
Less Intermediate consumption
Plus Taxes less subsidies on products
Typically presented in nominal and volume
terms
7
Income-based GDP
Compensation of employees
Plus Gross operating surplus
Plus Gross mixed income
Plus taxes less subsidies on products
Typically presented in nominal terms only
8
Drivers of GDP (1)
GDP in volume terms can be thought of in terms of the
following identity:
GDP(V) = E*LP
Where ---
E = average number of persons employed over the
period
LP = labor productivity, derived as GDP(V) divided by
average number of persons employed over the period
Put another way, GDP growth results from employment
growth and increasing labor productivity
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Drivers of GDP (2)
 The persons employed and the labor productivity
represent some of the “endowments” that a country has
at any given point in time
 The persons employed have a combination of skills,
knowledge and experience (quantity and quality
dimension)
 Economy-wide labor productivity is a function of the
labor productivity within individual industries, and the
compositional mix of industries (both change over time)
 The underlying sources of increases in labor productivity
are the accumulation of skills in the labor force, effective
deployment of supportive capital stock, and
technological progress
10
Drivers of GDP (3)
 The theory of growth identification and
facilitation focuses on identifying opportunities
for economies to grow by:
• identifying industries that are in line with a country’s
latent comparative advantage, based on finding
comparator countries with similar factor endowments
whose per capita GDP is up to 3 times the level of the
country; and
• targeting through industry-specific measures binding
constraints to faster growth and employment creation
11
Datasets of Interest (1)
 If official statistics are to inform on growth
identification and facilitation as described above,
some key datasets are needed :
• GDP (preferably all three measures) and its
components
• Price deflators so that volume measures can be
compiled (output and input prices)
• Industry decomposition of GDP (including the informal
sector, which is of interest in its own right)
• Highly desirable --- supply/use and/or input-output
tables
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Datasets of Interest (2)
 Population
 Persons employed by industry
 Labor productivity by industry
 Commodity production by industry
 Exports and imports by industry
13
Datasets of Interest (3)
 Catalysts for productivity change:
•
•
•
•
Capital stock and capital services by industry
Labor inputs by industry
Labor and capital price indexes
Industry characteristics (number of
businesses, entries and exits, firm size,
domestic/foreign owned, etc)
• R and D, innovation
• Inwards and outwards foreign direct
investment by industry
14
Datasets of Interest (4)
 Labour supply data, including:
•
•
•
•
•
Persons employed/unemployed
Age structure
Skills/education levels
Health status
Wages (Note: If wage-price inflation is to be
avoided, wage growth must be supported by
productivity improvements)
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Datasets of Interest (5)
 Other “endowments” of the economy:
• Natural resource base of the economy
• “Hard” infrastructure (transportation,
information and communication, water and
sanitation)
• “Soft” infrastructure (social cohesion,
inequality, institutional capacity, business
environment)
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Datasets of Interest (6)
 Relevant government finance statistics to
monitor government industry and other
interventions
--- data classified by purpose needed
 Household survey data so that the welfare
outcomes of macro-level developments can be
monitored
 As appropriate, regional data may be needed for
some of the datasets identified above
17
The Challenge
 The datasets identified above comprise a
rich array of statistics
 For many developing countries of interest
the datasets may well not be available, or
not be available in the detail desired
 We have a big challenge ahead
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Thank You
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